It is a fairly simple procedure to incorporate a business and as a professional you will benefit from the advantages of incorporation such as personal liability protection, taxation benefits and business credibility. When you incorporate a business you are required to complete a few necessary steps including filing your Articles of Incorporation with the state, drafting your Corporate Bylaws, obtaining a Federal Tax I.D. Number (also known as an FEIN or EIN) and choosing a registered agent. An online incorporation service can help you with each step or you can work with your state’s filing office, usually the Secretary of State, to incorporate a business.
You will need to select a state in which to incorporate a business whether it be for profit or nonprofit. Most often, small business owners will incorporate a business in their home state or the state where the business will be operate and be physically located. It might be of some benefit to your particular business to incorporate out-of-state, but virtually every state requires that an out-of-state company also incorporate in its home state, so make sure you have done your research prior to choosing your state to avoid paying more money than necessary.
In addition to choosing your state, you will need to choose a unique name for your business. The name will need to be available in your state and you should also know that some states have their own guidelines for business naming, so it is a good idea to have a few names picked out in case your first choice is not available for whatever reason.
You will need to wait until you have received the filing paperwork back from your state before your company is officially incorporated, but there are things you can do while you wait such as prepare a business plan for operating your business. Your business plan can be simple or comprehensive depending on the complexity of what your company will do and the requirements of your bank, if you are applying for a business loan. Other things to do while you incorporate a business include opening your company bank account, leasing office space, obtaining any permits or special licenses you will need and hiring employees.
Your corporation will be structured with Shareholders owning the company stock. Often, a small business owner operates a company on his or her own so exists as the company’s only Shareholder. It is also common for a small business owner to be the corporation’s one Director and hold all Officer positions (President, Secretary, Treasurer, etc.). A corporation is operated by rules set forth in the Corporate Bylaws, which are completed after you incorporate a business and can be modified in time as the business changes or grows. Operating a corporation requires, at the minimum, holding an annual Shareholders and Directors meeting, keeping written minutes of any decisions affecting the company and following general corporate rules as dictated in your Corporate Bylaws.
By completing the steps outlined to incorporate a business, your business idea will become a reality. An good online incorporation service will charge reasonable fees and assist you through the process of starting your own company.