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Forming a Business
The steps that need to be taken to successfully incorporate a business are actually quite simple, no matter how you choose to do it! This process can be coordinated by an attorney, you can use an online document filing service, or you can even prepare and file the required paperwork yourself. No matter which method you choose to incorporate your business, the steps to complete the incorporation include the following:
- Selecting a Corporate Name
- Verifying Corporate Name Availability
- Obtaining a Federal Tax Identification Number
- Preparing and Filing Articles of Incorporation with State Office
- Submitting Required Payment for State Filing Fees
- Deciding on Additional Organizational Matters
- Preparing Corporate Records
- Choose Who to Help You Complete the Process
Selecting a Corporate Name
When deciding on a name for your Corporation, you must take into consideration a few specific requirements. First, you must include a Corporate identifier such as “Incorporated,” “Corporation,” or an acceptable abbreviation of these such as “Inc.” or “Corp.” In addition, there are several words that are not allowed to be included in the name of a Corporation. The name you choose cannot be similar to another already incorporated business name within the same state. Also, the name you select must not attempt to take advantage of the identity or reputation of another registered business or corporation. Getting a trademark for your name will allow you to use it in any of the United States. Some other issues related to naming your Corporation include only referencing a professional, veteran, religious, or charitable organization if there is a certified connection to that organization. Overall, you cannot attempt to mislead anyone with the name of your Corporation. For example, you cannot use the word “Bank” in your name if you have not met the state banking requirements. It is a good idea to come up with one or two slight alternatives, just in case your first choice is already taken.
Verifying Corporate Name Availability
Prior to filing your Articles of Incorporation, it is imperative that you check the availability of the Corporate name you have chosen. If you file any documents with a Corporate name that has already been registered, that documentation will be rejected. So checking the phone directory and Internet for a public records search to see if there are any other registered Corporations with the name you have chosen can save you a lot of time and money.
Obtaining a Federal Tax Identification Number
Legally, every business must identify itself for tax purposes with either a Social Security Number (SSN) or an Employer Identification Number (EIN). If you are a Sole Proprietor, you can use your Social Security Number on all your government forms; however, if you intend to organize your business as a Partnership, and LLC, or a Corporation, you must apply for an EIN and use that number instead.
Preparing and Filing Articles of Incorporation with State Office
The “Articles of Incorporation,” “Articles of Organization,” “Charter,” and “Certificate of Incorporation” are the required documents that must be filed in order to properly incorporate your business. As part of these documents, you must also establish your Corporation’s Registered Agent, the person who will accept legal documents on behalf of the Corporation. Once these documents are completed and neatly typed, they must be filed with the State Secretary or otherwise designated agency. It is a good idea to pay the nominal fee to a professional filing service in order to ensure the proper filing of your Corporate documents.
*After January 1, 2000, every corporation is exempt from the prepayment of franchise tax at the time of filing. In addition, the corporation is exempt from the minimum tax for its first tax year.
** Nevada formation fees require an additional $125 fee to file the Initial List of Officers/Members.
Deciding on Additional Organizational Matters
Once the initial documents have been filed to establish the Corporation, there are several other steps that must be taken. You must officially adopt the Articles of Incorporation that were filed with the State. Bylaws must also be drafted and adopted. Officers must be elected, stock must be issued, and a corporate seal must be approved. Typically, these issues are handled at the first organizational meeting where the proposed officers, directors, managers, and shareholders gather to make decisions on these issues. These decisions are then included in the meeting minutes.
Preparing Corporate Records
The IRS requires that all Corporations keep very detailed records of all the activities a Corporation engages in. This paperwork demonstrates that your Corporation is properly maintained and organized and will be necessary in case the IRS or any financial institutions considering lending you capital want to review your Corporate records.
Choose Who to Help You Complete the Process
As you can see, there are many important steps to properly forming a Corporation, and deciding who you want to assist you in the completion of this process is another important decision. Clearly, you can decide to prepare all the documents and file them yourself if you are willing to spend the time and the effort. If you are willing to spend a significant amount of money, you might also consider paying an attorney to assist you.
However, the fastest and easiest way to you’re your Corporation is to choose a legal document preparation and filing agency that is trustworthy and has an impeccable reputation. Companies Incorporated is that agency! We file hundreds of documents every week nationwide and have the highest rating in customer satisfaction. Call us today!!
Once the incorporation process has been initiated, there are also several required follow-up steps that must be completed in order to begin managing your business as a Corporation including:
- Declaring IRS Tax Status of Corporation
- Opening a Corporate Bank Account
- Starting a Corporate Record Book
- Preparing Trademark or Patent Documentation
- Filing List of Officers and Directors, if required
- Consulting with a Tax Professional
At this point, a decision regarding the IRS tax status of the Corporation must be made. There are many important decisions that must be made related to the taxation of the Corporation as a C-Corporation or an S-Corporation (see C Corporation vs. S Corporation above). Once a Corporation has received its Federal Tax ID number, as well as filed its Articles of Incorporation, and the government file-stamped certificate, separate bank account(s) should be opened for the Corporation. This is to ensure that no co-mingling of personal and Corporate funds occurs. There are also several follow-up documents that must be filed with the state, such as the list of directors and officers. A Corporate Secretary must also be assigned and charged with the responsibility of keeping the Corporate Minutes. It is also a good idea to have a professional tax accountant who specializes in Corporate accounting prepare the required tax filings.
INCORPORATE ONLINE TODAY
1-800-Company offers complete online processing of your Corporation order 24 hours a day. You can also speak with one of our incorporation specialists about any questions or concerns you have regarding incorporation Monday through Friday, 7:00 am to 5:00 pm Pacific Standard Time. We offer reliable and efficient service for all 50 states. There is no one else who can incorporate your business faster than Companies Inc. And your satisfaction is 100% guaranteed.