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When you incorporate a business, you create a separate legal entity. The steps you’ll have to take to incorporate a business may depend on where you want to incorporate. In most places, however, you will have to choose a business name, file articles of corporation, create bylaws, and choose board members as part of this process. You will likely have to pay filing fees as well, and many jurisdictions will require you to obtain a separate tax identification number for the new corporation. Since the documents you will have to file and the steps you’ll have to take may vary from place to place, you may do well to start the incorporation process by learning the specific requirements of the jurisdiction you’ve chosen for your corporation.
One important part of incorporating a business may be deciding who will be the registered agent for the corporation. This can be you, an attorney, another person involved in your business, or even a member of your family. Whomever you choose will usually receive forms and notices on behalf of the corporation while it is in operation. In most cases, the registered agent must live in the jurisdiction in which you will incorporate.
Compared to other business structures, creating corporations can be expensive. In some places, the fee to incorporate a business is well over $100 US Dollars (USD). If you choose to hire a lawyer to help you incorporate your business, you may have to pay hundreds of dollars for attorney’s fees on top of the filing fee. Additionally, there are incorporation services that can handle the filing for you. They are often less expensive than hiring an attorney to handle this task, but they can be more costly than filing the incorporation paperwork yourself.
You will typically have to file articles of incorporation when you incorporate a business as well. You may obtain instructions for filing articles of incorporation from the government agency responsible for accepting and reviewing your paperwork. You will usually, however, have to list the name and primary address of your corporation, the purpose of your corporation, and the names of those who are incorporating it. Additionally, you may have to list the number of stock shares that will be issued and the class of stocks you have chosen.
Preparing corporate bylaws is also part of the process of incorporating a business. You may cover such things as the dates and times of shareholder meetings and how your shareholder meetings will be held. You may also include information about how you will elect board members for your corporation and the responsibilities the board members will have.
You will usually have to hold a meeting to elect a board of directors for your corporation as part of setting up a business with this legal structure. These people will help oversee the corporation and ensure it is run in a manner that protects the interests of its shareholders. Depending on where you are located, you may also have to apply for a separate tax identification number for the business before it can be incorporated.
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