Selecting an Appropriate Corporate Name
Very often, you will find that another company has already taken the name that you choose and that there are trademark issues associated with the name. It is necessary to make sure that the name with which you are planning to incorporate your small business is not in use and is available from the Secretary of State of your state. Selecting the right name is necessary because it helps in making the right first impression on customers and clients. You can also log onto websites that provide information about available names and trademark issues associated with them.
Where to Incorporate
Some states, such as Delaware and Nevada, offer special tax incentives for companies that register there. However, most of the incentives are offered to big businesses and those for small businesses are often too small to make much difference.Some states, such as Delaware and Nevada, offer special tax incentives for companies that register there. However, most of the incentives are offered to big businesses and those for small businesses are often too small to make much difference. Keeping this in mind, it may make more sense to incorporate in the same state in which you are planning to do most of your business.
Complete Documentation Formalities
Before the actual incorporation, you need to prepare all the necessary documents that are required by incorporation authorities. Depending on the type of business, you will be required to prepare the Incorporation Certificate, the Stock Ledger, the Resolution of the Stockholders, the By-laws, Stock Certificates, the Resolutions of the Board of Directors and many other documents. Samples of all such documents are readily available on the Internet and some websites will even help you in preparing your incorporation documents. There are also incorporation services that you can find on the Internet that will prepare and file all the necessary documents for a fee.
File Your Incorporation Documents
After preparing the incorporation documents, you need to file them with the Secretary of State. The main document that needs to be registered is the Certificate of Incorporation, which is sometimes also referred to as the Articles of Incorporation. This document acts as legal tender and is the official confirmation for starting your business.
Complete Financial Requirements
You need to select the most appropriate funding model well before the actual date of Incorporation. Based on financial projections, you can opt for short-term loans, long term loans, public offerings, VC (venture capital) funding or angel investor funding. If you opt for a public offering, you need to comply with state and federal securities laws. You can get help from a corporate lawyer who has experience in the stock issuance process.
Corporate organizations are required to maintain proper documents such as the Minutes book, which contains a briefing of everything that is discussed or mentioned during a board meeting. Make sure that you maintain such documents and keep the records in the Minutes book. In addition to documentation, you will be required to appoint the required number of directors based on the corporate laws of your state.
If you do not want to appoint too many directors, you can opt for a single director (you), as in most states it is legal for a person to hold multiple positions, such as being a CEO and CFO. To start your business, you will also be required to have a Federal Tax ID number, which can be obtained by filing a simple online form available on the IRS website. You also need to find out whether your business will require any kind of special permits. All this will ensure that your business will not have to face any kind of legal issues in the future, enabling you to concentrate on making your business a success.