CORPORATION DEFINED:
A corporation is a separate legal entity hence giving limited liability to the owners. The owners of a corporation are shareholders. Shareholders' liabilities are limited to what they invest or the par value of the shares they have. The board of directors elect the top management usually the CEO (president), Vice President, Secretary, and the Treasurer. In the United States corporations are chartered by state. Each states has its own set of corporation laws including laws regarding taxes.
Please be advised that there are variety of corporate entities. The following are some basic corporations that are incorporated in the states:
Please be advised that there are variety of corporate entities. The following are some basic corporations that are incorporated in the states:
- C Corporation [Corporation (Corp.) / Incorporated (Inc.) / Limited (Ltd) / etc] can elect to become an S Corporation
- Limited Liability Company (LLC)
- Professional Corporation (P.C.)
- Limited Partnerships (LP)
- Not-for-profit corporation (Nonprofit)
Before you can incorporate a business entity, you need to know if the name of your business is available in the state. There are incorporating companies that checks the name availability, prepares and submits the certificate of incorporation for filing, and provides you with a corporate kit (By-laws, minutes, share certificates, etc) Consult with an attorney and certified public accountant rather incorporating is best for your business. Further, please note that attorneys and CPAs can incorporate so you don't need to frantically search for legitimate incorporating company or you can do it yourself. If you decide to incorporate on your own there are fees involved. Like government issued permits and licenses, incorporating fees differ from the type of company and by the state. Also, there is something called franchise taxes and biennial statements. Nothing to be alarmed about but you should consult with a tax professional.
Further, please be aware that these corporations that are formed are not publicly traded companies. You'll need to register the corporation in the Stock Exchange but that is a different scope of this topic.
CORPORATION NAME AVAILABILITY STATE WEBSITES:
Some states will require a fee to do a name availability check but the provided three states are free. Please be advised that just because the business entity name seems like it's available doesn't mean it will always get filed with the state. These are the know hows of professional services but even they can't guaranty that it will get filed. The professional service companies are likely more accurate.
Further, please be aware that these corporations that are formed are not publicly traded companies. You'll need to register the corporation in the Stock Exchange but that is a different scope of this topic.
CORPORATION NAME AVAILABILITY STATE WEBSITES:
Some states will require a fee to do a name availability check but the provided three states are free. Please be advised that just because the business entity name seems like it's available doesn't mean it will always get filed with the state. These are the know hows of professional services but even they can't guaranty that it will get filed. The professional service companies are likely more accurate.
ARTICLES OF INCORPORATION / CERTIFICATE OF INCORPORATION
After the name availability, you will need to prepare the articles of incorporation/certificate of incorporation / certificate of formation to be submitted for filing with the state. Each state has different forms of such in their websites for the various types of corporations. Below are some fees and forms associated with the filing. Please remember that just because the name is available, it doesn't mean that it will get filed so don't start making your business cards until you receive the confirmation from the state. Sometimes, the papers may get rejected because of similar name or error on the certificate.
After the name availability, you will need to prepare the articles of incorporation/certificate of incorporation / certificate of formation to be submitted for filing with the state. Each state has different forms of such in their websites for the various types of corporations. Below are some fees and forms associated with the filing. Please remember that just because the name is available, it doesn't mean that it will get filed so don't start making your business cards until you receive the confirmation from the state. Sometimes, the papers may get rejected because of similar name or error on the certificate.
CORPORATE KIT
A corporate kit consist of corporate minutes, stock certificates, by-laws, form SS-4 (To obtain your Employer Identification number - E.I.N.). The corporate minutes are documents referencing the corporations meetings of the board members, election of top management, general rules and regulations of the corporation, and blank stock certificates issued to the shareholders. You'll need to order this corporate kit / corporate book with a publisher that provides. Below is a unverified website. I never ordered it from this site but this is to provide you with an example and visual:
A corporate kit consist of corporate minutes, stock certificates, by-laws, form SS-4 (To obtain your Employer Identification number - E.I.N.). The corporate minutes are documents referencing the corporations meetings of the board members, election of top management, general rules and regulations of the corporation, and blank stock certificates issued to the shareholders. You'll need to order this corporate kit / corporate book with a publisher that provides. Below is a unverified website. I never ordered it from this site but this is to provide you with an example and visual:
THE NEXT STEP
Once you have the filed certificate and the corporate kit, fill the SS-4 Form or you can go online to IRS and obtain your Employer Identification Number.
Once you have the filed certificate and the corporate kit, fill the SS-4 Form or you can go online to IRS and obtain your Employer Identification Number.
With the confirmation from IRS that your EIN has been issued, go to the bank of your preference and open your corporate bank account. (Remember each bank has its own attributes of their business accounts. Pick the one that gives you the most benefit.)
FINALLY
Good luck. Any legal or accounting matters, consult with an attorney or CPA.
The above sounds complicated but it really takes less than 3o minutes to submit the papers for filing. All you have do is wait for the corporation to get filed with the state. Depending on the how fast you want to get it filed the filing fees have significant differences.
FINALLY
Good luck. Any legal or accounting matters, consult with an attorney or CPA.
The above sounds complicated but it really takes less than 3o minutes to submit the papers for filing. All you have do is wait for the corporation to get filed with the state. Depending on the how fast you want to get it filed the filing fees have significant differences.
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