Business owners who are ready to start a new corporation can begin this journey successfully if they follow the necessary considerations. There are a set number of tasks that must be done in order to get your corporation up and running. Here are the things that business owners need to do.
1. Create a Business Name: It is important to create your business name before going through with additional procedures. You need to research your name’s availability in your state and make sure there are no other organizations with similar sounding titles. Then, you should register your business’ name to secure your rights.
2. Choose a Location for Your Corporation: In most cases, a business owner chooses to incorporate in the state in which he or she resides. Some situations may require you to think about choosing a different location for your corporation. Your organization may be eligible to register as a foreign entity in a different state that may offer business owners attractive incentives.
3. Appoint a Board of Directors: Your board of directors is an important aspect of business that could predict the future success of your company. When you get to the point of being ready to appoint key individuals to the board, you must carefully consider each person’s skills and experience that can help lead your company toward the future. These are the people who may be making the most important decisions alongside of you in relation to your corporation.
4. File Incorporating Documents: Along with your board of key personnel, the next thing to check off of your to-do list is to officially file your incorporating documents. There is a cost associated with filing articles of incorporation, and it can start at approximately $100, depending on the state you’ve chosen to use as your home base. You can choose to write this document yourself or hire an outside individual to help you draft the basics of your company.
5. Write a Set of Corporate Bylaws: The next item to begin writing is your group’s set of corporate bylaws. This vital record sets up your organization’s clauses, structure and procedures. All aspects of maintaining the corporate structure should be addressed in the bylaws to ensure a smooth transition from startup to productive business.
6. Meet With Your Directors: After appointing your key people, you’ll want to next meet with them in person for your first official board meeting. This exciting stage is when many business owners begin to truly realize that their corporation is finally coming into existence. The purpose of the first board meeting is to run through the process of the creation of the company, discuss the corporation’s goals and ratify the bylaws.
7. Devise a Shareholder Agreement: For some businesses, a shareholder agreement must be drafted. Depending on the type of corporate structure you’ve created, this allows for a plan if the business is sold.
8. Organize Financial Considerations: To set your company up on the path to success, you should designate a sole bank account for the new corporation. Financial accounting systems should also be planned out for ease of operations.
9. Distribute Stock to Shareholders: In some situations, a corporate agreement includes a setup to distribute stock to shareholders. If this applies to you, this divides up the share of ownership among the stakeholders.
10. Make Sure You’re Compliant: The last thing to consider at the initial creation stage of your corporation is any type of regulatory or compliance issues. If your company requires different types of permits or certifications, make sure those are taken care of before beginning the official start of business.
Incorporating your organization can be an exciting time for a business owner. Going through the steps can help your company begin to take shape and can make you transition into a new stage of your business career.
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