The process of incorporation is pretty clear-cut. However, you still need a lawyer to help you through the steps to ensure incorporation success. By contacting me or my legal team, you can establish your business as a corporation hassle-free.
Book a call to speak to us here: https://mollaeilaw.com today. But, first, read the following information to get a better idea of what to anticipate.
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The Process of Incorporation: The Steps You Need to Take
To go through the process of incorporation, you need to begin by doing the following:
1.Choose a Name
The exciting part of forming a business is choosing the name. You just need to make sure the name is not taken. Therefore, you need to go to the Secretary of State’s website and see if the name you like is already in use.
Have a back-up name in mind in case the name has been snatched. In this day of electronic domain use, you want to make sure that you can use your newly chosen name as the domain name for your website as well.
When selecting a company name for your corporation, you must attach “Inc.,” “Corp.,” “Corporation,” or “Incorporated” to the name legally.
2. Select a Location
You will also have to determine the location for your business, as it will be the place where you will incorporate. Your location should be a professional site, even if you elect to make a virtual office address your primary office address.
The name and location you choose will influence what type of response you receive from your customers.
If you need to obtain advice during this part of the incorporation journey, I am always here to help. Simply email email@example.com with any concerns or inquiries.
3. Obtain a Registered Agent
To take care of company correspondence, or its receipt and delivery, you need to use the services of a registered agent – an individual or business, based in your locale, that can receive and deliver documents and letters on your behalf.
They should be available during the business week from 9:00 am to 5:00 pm. Don’t make any further moves until you retain the agent.
To obtain a registered agent, you can ask my suggestions. Email firstname.lastname@example.org to find out more about retaining registered agent services. Some start-ups use a person in their corporation to serve as a registered agent.
4. Choose Your Corporate Entity Type – S Corporation or C Corporation and File the Articles of Incorporation
While a C Corporation represents a traditional corporation, an S Corporation is normally designed for start-ups that are U.S. based. If you form a traditional C Corporation, you will be subject to double taxation. This means you must pay taxes on the business and the dividend payments remitted to the shareholders.
By choosing S Corporation or Subchapter S status, you can enjoy pass-through taxation on your business taxes and pay only once, on your individual tax return. While the shareholders support the operations of a C Corporation, S corporations are normally run by the owner and generally managed.
Whether you choose C Corporation or S Corporation status, you need to file articles of incorporation with the state where you will be doing business. This document describes the shareholder structure and identifies the initial directors.
If you reside in another country, you cannot become a shareholder of an S corporation. To participate as an S Corporation shareholder, you must be a U.S. resident, a trust and estate, or tax-exempt organization. Partnerships or corporations cannot qualify for shareholder status either.
If you do form an S corporation, you are allowed, legally, to issue 50,000 stock shares. However, the board of directors can choose to issue, for instance, 10,000 shares instead of all the shares at once as well. Therefore, they can choose to issue the other shares at another time if they need to increase their capital.
An initial shareholders’ meeting must be held prior to the filing of the Articles of Incorporation. This meeting is meant to address certain required formalities, such as the allocation of stock and the formation of the bylaws. A corporation’s bylaws are designed to cover items, such as the meeting times, who will serve as corporate officers, shareholder voting rights, stipulations for approving contracts, and the rules for signing checks.
S Corporation shareholders are limited to 100 shares, and all of the shareholders must be U.S. citizens. C corporations do not have any restrictions in this regard.
5. Obtain an EIN, Open a Bank Account and Finalize the Attainment of Licenses and Permits
After you file the Articles of Incorporation and pay the applicable fees, you need to secure an employer identification number (EIN) so you can pay employees and open a U.S. bank account. You will also need to make sure you obtain the required legal licenses and permits.
While the above steps are laid out clearly, you still need to obtain legal support to make sure everything goes smoothly. Call me or email email@example.com to ensure incorporation success.
Mollaei Legal Tip: Most incorporated businesses should file with the state after the initial board of directors meeting. When stock is being sold, federal securities measures must be addressed. Usual licenses or permits you may need to obtain include food handler permits for restaurants, professional licenses for solo practitioners, or sales tax I.D. numbers.
If you want everything to go smoothly during the 5-step incorporation process, you need to contact me for an appointment before you begin. Email firstname.lastname@example.org to begin the steps of incorporation now.
I can support your efforts toward incorporation and help you understand the requirements found through the Department of Corporations website for your state. Guidelines may also be featured through a state’s small business division.
What To Do Next
When you go through the process of incorporation, you will find that you need to observe certain formalities – formalities that will include holding annual share meetings, setting up shareholder voting, and adding amendments to the bylaws from time to time.
While forming an entity, such as a limited liability company (LLC), is less formal and time-consuming, it is easier to obtain venture capital when you choose to incorporate. Therefore, start-ups who choose to make themselves corporations can raise capital easier than other entities.
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