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How do I Start a Corporation?

G. Wiesen
G. Wiesen

In order to start a corporation you should begin by having a business or company you want to incorporate. If this is an existing business you want to turn into a corporation, then much of that process is already complete. If you are starting a new business, however, you will want to decide on a number of aspects regarding the new corporation. You will then need to register your company in the state, province, or country in which you wish to do business, establish your corporation’s by-laws and articles of incorporation, and file the necessary paperwork and pay any required fees in order to incorporate.

The process by which you can start a corporation is different from region to region, so you should contact whatever local government agency handles incorporation in your area. In the United States (US), this is typically handled by the office of the Secretary of State for whatever state the corporation is being started within. The home state of a corporation in the US is typically determined by the state in which the business will primarily operate. If you are incorporating a small business, then you will likely choose the state in which you operate your business to register your name and file the necessary paperwork with.

Businesswoman talking on a mobile phone
Businesswoman talking on a mobile phone

To start a corporation, you need a name for your business. First, consider if the state or area in which you are incorporating requires corporate identifiers such as “Incorporated” or “Limited” as part of corporate names. Then check to ensure other businesses do not already have any name you are considering.

Once you have your name, you should choose the state or area in which you will incorporate. Some states have tax laws and other incentives that make them more attractive locations to start a corporation. If you are going to be operating primarily in another state, however, you would have to be registered as a foreign corporation in that state, which may reduce the effectiveness of such incentives.

You should then create your corporation’s by-laws and articles of incorporation, which will establish how your corporation is operated and determine the directors and other officers within your corporation. Creating a shareholder agreement is also important as you start a corporation to determine how the shares of your corporation will be managed. For small businesses, a single person can serve as sole director, officer, and shareholder, though larger corporations may have dozens of people handling those roles.

Once these steps are complete, you can file the articles of incorporation with the state or area you have chosen to start a corporation within and pay any necessary fees. You should consider what form of tax status you want your corporation to have, and choose accordingly. It is also prudent to open a bank account in the name of the corporation to be used solely for corporate purposes, start a minute book for recording information from corporate meetings, and hold your first meeting of the board of directors.

This may consist of only you or a few people, but it is still an important step to establish your new corporation. You can then issue certificates to any shareholders if necessary, and you should register for any applicable operating licenses for your business. It is also important that you follow any legal requirements for corporations in your area. You may wish to consult a corporate or business attorney to ensure proper, legal running of your new corporation.

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