While there are many types of business entities that you may choose to form, many will choose to set up a corporation because of the many benefits it provides. The good news is that it is actually a rather simple and easy process when you know how to set up a corporation. You may set up your corporation on your own, but many business owners will work with a law firm for assistance with each of the steps.
Selecting Your Corporation’s Name
There are several forms that need to be filed with the state when setting up a corporation, and you will also need to pay the incorporation fee. However, before you can begin these steps, you will need to choose a name for your corporation. This can be more challenging than it sounds. This is because you need to make sure that the name is suitable for your business, that it is not already taken by another company and that it does not violate any existing trademarks. Many companies will work with a law firm for help, even at this preliminary stage in the corporation formation process.
Selecting the Directors
One of the key pieces of information that is required to be filled out on your corporation paperwork is the names of the directors. Each director will be formally named, and their percentage of ownership, their shares of stock and their salaries will be formalized in the paperwork. It is important to note that many business owners will name themselves and business partners as directors, but others may choose non-owners, such as spouses.
You should take time to learn more about the rules and regulations for selecting and appointing directors for the corporation, and a business law firm can assist you with this process.
Completing and Filing the Paperwork
There are several important corporate documents that must be filed when you set up a corporation, and these include the Articles of Incorporation and the Shareholders’ Agreement. The Articles of Incorporation can be as simple or basic as you desire, and they list the official details about your company, such as the registered agent, the business address and other important information. It also typically includes by-laws, which ultimately will be approved during the shareholders’ first meeting. The Shareholders’ Agreement states what steps will occur if a shareholder leaves the corporation due to disability, retirement or death.
Other Steps to Take
Before the corporation set-up can be finalized, there are several final steps that you need to take. These include holding a meeting for the board of directors, issuing stock and registering the corporation with the Securities and Exchange Commission when the company is larger in size.
These steps can be simple and easy, or they may be rather complicated and confusing for some business owners. In order to ensure that the company is a legal corporation, the steps must be completed the right way. If you are concerned about your ability to complete the steps accurately, you may consider reaching out to a law firm for assistance. Contact a business law firm to learn more about how to set up a corporation or for information about the benefits of a corporation.