Forming a corporation can be a daunting prospect for a new business owner, but it is fundamentally an easy process. You can choose to go it alone, using tutorials and self-help guides; or you can opt to ask the professionals to help you with the process.
The first thing you need to do when forming a corporation is to pick the company name. You can find out what is off limits by searching the internet and contacting your local corporate office. One stipulation is that the name must end with a word like “Incorporated” or “Limited”. Once a name is chosen you are ready to move forward.
The next part of the process involves you electing directors and members of the board. They are appointed to make sure the company is run correctly; the area where you are registering the company may ask you to have one or more directors. These places must be filled before you can consider filling in any of the forms.
Blank forms can then be obtained from the corporation filing office. They will require details such as the name of your company, the director’s name, board member’s names and the address of your company. You may also be asked to appoint a registered agent and provide their details. This person has the responsibility of being the points of contact for the public should any legal matters arise.
You then have to create the corporate bylaws which are a fundamental part of forming a corporation. These bylaws are the rules that the company will follow and will also outline details such as dates for annual meetings for the shareholders. Once this is done, a meeting of the board and directors is usually arranged to iron out any lat minute issues.
This then leaves the final stages of forming a corporation which are the issuing the stocks of shares and obtaining an EIN (Employee Identification Number). Once this is complete you are more or less ready to start trading as a corporation.
If this all seems a bit too much, there is the option of purchasing ready made companies. There are providers out there who have already registered companies and are willing to sell them to you for a reasonable price. The price that you will pay for ready made companies is usually determined by the age and name of that company.
If you decide that you would like to try forming a corporation, there are many advantages to doing so. You could benefit from a lower tax rate and are protected by limited liability regulations. This essentially means that assets and shareholder investments cannot be seized. As long as you conduct your company in the right manner you will be protected by these regulations.