Incorporation
Start up advice
Forming a corporation can seem like an overwhelming task. Slightly more complicated than opening a traditional small business, there are a number of different laws and regulations to which corporation owners must adhere.
A corporation is different from a small business in several ways. Corporations are owned collectively and offer shares to investors in order to facilitate the operation of the business. There are also several different tax laws - and deductions - that apply to a corporation. Shareholders and owners are less liable for the profitability of a corporation, while in a small business a single owner may be the only source of initial capital and therefore carries a large investment.
Tips to Remember
Once you’ve decided on a corporation format for your business, there are a few things you should keep in mind:
- Choose your name carefully. There are different rules for corporation naming in different states. Some states require that your name indicate your corporate status. You also have to check that your name isn’t already in use by another company.
- Keep detailed documents. A corporation requires more official documentation than a traditional small business. You need to write up documents such as your articles of incorporation to establish your corporation, and you need to create your corporation’s by-laws and shareholder agreements.
- Obtain all necessary licenses and permits. There will be different requirements for your corporation depending on your city and state. There are also federal requirements that you have to keep in mind. Make sure you do all your research when it comes to licenses and permits, because it can cost you a lot in the end if you find yourself operating illegally.
Get Help!
Starting up a corporation can be complicated. For new business owners, you might want to consult a business attorney who is familiar with your local and federal requirements.
A lawyer will help ensure you don’t miss any of the important steps, that you fill out all the required paperwork properly, and that you’re aware of all the steps necessary to continue to run your corporation legally.
Forming a corporation means you’re in for the long haul, and you intend to involve a number of different people in your venture. Take advantage of all the resources available to you so that you find yourself a great success!
