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How Do I Incorporate My Business?
When setting out to start your new venture, you have to decide what form of organization is right for you. If you've already taken our free tutorial on choosing the right business entity and have chosen to incorporate, this tutorial is for you.
As with every legal tutorial, your mileage with this tutorial may vary. Local, state, and country laws are different all over. Learnthat.com does not provide legal advice - we strongly recommend you find a professional business attorney to assist you with this process. Anything we say in this tutorial may be wrong, we hope it is all correct, but take it all with a grain of salt. To sum up: go talk to an attorney or your Secretary of State's office (Contact information at the bottom)!
1. Where should I incorporate?
Typically, if you only operate in one state, you should incorporate in that state. If you operate in multiple states, you should determine which state is the friendliest to corporations and incorporate in that state. The friendliest state in the nation is Delaware, it has designed its laws and legal precedents to be very business friendly.
2. Select a Corporate Name
Selecting a company name can be daunting task. Most Secretary of State (SOS) offices require you to check with them to see if your chosen name is available before registering documents using that name. Most additionally require you file paperwork for your fictitious name (DBA, or Doing Business As) to register it prior to filing your corporate registration paperwork.
Perform an Internet search on Google (you can use the search box on the left) to see if your name is going to conflict with an existing business. In addition, check the US Patent and Trademark Office for an existing trademark for your company name.
3. Determine Who Will Register the Corporation
You will need a Registered Agent in your state of filing to receive official corporate forms, paperwork, and notices. This can be you, a family member, an attorney, or a service specifically hired for this task. This Registered Agent must live in the state you are registering in. If the state is one you do not do business in, Delaware for most corporations is a popular example, there are companies formed to perform this task for you.
4. Determine Who Will File the Paperwork
There are generally three ways to incorporate: self-filing, incorporation service, or business attorney. Self filing is the least expensive option, though can cause problems if not performed correctly. Incorporation services generally costs several hundred dollars and can take some of the confusion out of the process. The final and most expensive option is the business attorney who can cost from several hundred to several thousand dollars.
5. How Will the Stock be Structured?
When you incorporate, you issue stock to shareholders in the corporation. Depending on the makeup of the ownership in your corporation, this task can be time consuming or simple. In most states, the more shares you issue, the higher the charges and yearly filing fees. You can design several different classes of stock which have different voting and preferential rights in a company. You will define these classes in your incorporation documents.
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