There is no crime in feeling overwhelmed or lost in the cost of forming a corporation, but with the kind and amazing help this article is going to render, you have every reason to rejoice, as the confidence in you needed to create your own business entity will be revived and you will get back to what you love doing the most once more.
Just that this time, with full force and the needed experience!
Are you interested in forming a corporation but don’t know what to put in place? If you have been longing to have your own business corporation but too scared to approach the project, why don’t you use this opportunity to read and study this guide to your own advantage?
Well, there is no point disputing the fact that the corporate business entity is akin to a unique and a whole person that you create, build, and get to control. The business corporation has its own lifecycle, tax life, laws, care instructions, and discipline.
But mind you, forming a corporation is not as easy as it seems. The business corporation has its own lifecycle, tax life, laws, care instructions, and discipline. Definitely no. The good news is just that you don’t have to know most of the codes and laws that revolve around the process.
Without further delay, the following are the best available steps you can conveniently follow to form your own business corporation with ease and without any problem.
Read Also: Types of Business Enterprise
1. Business Location
The first thing expected of you when forming a corporation is to decide where the proposed business will be located. If you like you can find a perfect location in your environment and you may want to consider the market feasibility of the business by setting the business corporation up in another geographical location other than where you stay.
Whatever you want to do regarding the location of the corporation, it is very pertinent you know that there are rules governing forming of a business entity in many States and these rules vary from one State to another. So know what the rule of the place you are planning to situate your business corporation says and follow them.
In case you are having difficulty locating a particular location for the business corporation, it is ideal if you can incorporate it where you are physically present or where you think most of the business operations will be carried out.
However, it is important you know that anyone has the constitutional right to form any lawful and legitimate corporation that he so wishes hence, decides on the location you will like to be carrying out the business operations and then proceed to the next step.
2. Give the Corporation a Suitable Name.
Do you have a unique name that you’ve been longing to name your own personal corporation? Is the simple and very easy to pronounce? If so, now is the time to put the name forward and let your dream come true.
Having found a suitable place for the proposed business corporation; the next cause of action is to find an interesting name for the business corporation. A business name that is distinct from any business name in the industry, easy to pronounce and unique. However, in the course of naming your business corporation, there are certain things you need to put into consideration in other to avoid unnecessary drama and ugly legal battles.
Among them are, the business name should be what will not cause any form of copyright infringement with any existing corporations or be rejected by the government and it should be what your customers can easily pronounce or remember. To know if your desired business name wouldn’t fall into these categories, you can forward the proposed corporation name to the government agency responsible for the business name in your State to check if the name is unique, free from any patent or trademark issues and if it is acceptable.
However, if you wish to name your business corporation after your own name, there’s no problem with that as long as it doesn’t fall into any categories of the above mentioned.
3. Choose the Corporation Board of Directors
Yes, naming your board of directors from the preliminary stage of forming a corporation is very important. You don’t have to wait till the business corporation is up and running before you do this. It is an issue that has to be done with once and for all.
So ass official as naming your business boards of directors may seem to you, these directors should be set of people who can legally act in the corporation’s best interest. People you know and you can trust that they will never jeopardize the interest of the corporation for anything.
Plus, you also can be one of the directors if you so wish, the tradition allows that. This will enable you to motivate them when needed and at the same time knows who is active among the rest and who is playing with his own role as a director.
So, therefore, if you are going to appoint your directors, you can check the corporate affairs bureau of your State or where your business corporation will be situated for the least number of people you can appoint as board members. But nevertheless, you might want to consider having five people in the capacity pending the full operation of the business corporation.
Moreover, some State law requires that individual board members should at least hold the position of the corporation president, secretary, and treasurer. Typically, it is expected that you will include initial investors as well as mentors on the list of the company board since you are starting new. So pick your corporation board wisely by putting their long-term commitment into consideration.
4. Choose Your Registered Agent.
For the purpose of moving the corporation to its greater heights, it is important you be your own register agent but if you will be too busy and wouldn’t pay close attention to the office of the agent as it is expected, then, it is better you hire a competent individual in that regard.
This is because a registered agent will be the person in charge of accepting processes, official mail, and other services directed to the business corporation. You can’t afford to play with this role! Someone serious and active should be chosen for that purpose.
Meanwhile, there should be a physical address of the company agent in the place, State or city of the business corporation and the agent must always be available at the business hours. The reason is that whenever the corporation is in conflict with anyone — whether an artificial person or juristic person — and they are suing your business, the physical presence or address of the agent will enable them to properly contact the organization by serving the company with the processes.
5. Sign the Necessary Paperwork
Now is the time for you to file your article of incorporation to the corporate affairs agency that is responsible for incorporating any established company. This action can be carried out by you, and you may at the same time engage the service of an attorney who is professional in dealing with issues like that. Whatever your choice is, they are both fine and good.
Essence, it is practically impossible for any business corporation that is not registered before the government to be up and running. If it does, such a business entity will be considered an illegitimate business entity and it may even face the wrath of the law. So, do all the necessary paperwork and acquire whatever license your business corporation needs to get.
In the same vein, you don’t have to be scared as to whether your establishment will be incorporated or rejected. With every single thing you have prepared so far, this step will definitely be a goal — the paperwork is easy to fill and is often a couple of pages.
Plus, each State has its own unique business licenses and its requirements and it varies from one State to another, so it is ideal if you heavily rely on your lawyer in doing must of the paperwork for you. All you to do is to ensure you are with him during the course of the registration and incorporation in your signature is required.
No matter what happened, this particular section can’t be skipped or overlooked in the course of forming a corporation. The paper of incorporation is, without doubt, the official legal documents you will file in the process of establishing your new business corporation, the unique name you’ve picked, your chosen board of directors, and the registered agent.
6. Create the Corporation’s Bylaws.
Like the old cliche “where there is no rule, there is no sin.” Hence, it is very crucial you create certain rules and regulations that will be regulating the affairs of the corporation. This may look like a hard task but the truth is that it is an easy step then it seems. If you can’t draft the bylaws on your own, engage the service of a lawyer — it will be better if you have one for your business corporation — to help you with your new corporation’s bylaws and don’t forget to tell him to keep it legally simple as possible.
Informatively, the bylaws will be found very useful in outlining the basic operations and procedures of your business corporation. It will cover all the areas discussed above which includes the company’s location, name, and the members of the board of directors with their certain responsibilities.
Finally, if you engage the service of a lawyer, make sure you tell him what you want to include in the bylaws and what you don’t want to suffice therein. The bylaws, however, should endeavor to outline the procedure to be followed whenever it is called for editing or review in the future.
7. Create a Record Book for The Corporation.
You may not have to trouble yourself with creating a record book for your corporation company if you’ve initially passed through the incorporation service. This is so because they would have to provide you a binder with your stock certificate, bylaws template, and sometimes, a corporate seal embosser.
But if you did all the incorporation services on your own, you will need to get a binder for the corporation. The three-ring binder is the legally required one and as it will be used to house all the company board minutes of the meeting. So, get a nice binder for the record and keep it in a very nice and safe place!
8. You are Good To Go
The moment you realize that all the above steps have been successfully fulfilled, you don’t have to wait for anything as your corporation is very good to go. Don’t worry about anything again, go run your new corporation and don’t forget to keep sticking with the rules!
Moreover, you are at this stage probably relieved and happy that you can finally get back to that amazing work you love doing. However, as your business corporation keeps progressing, there are certain things or items that you have to keep on your radar.
Among these important items are; regular payment of taxes — it is immaterial whether your business is new or you know little or nothing about it — it is a must and you have to be paying it, obeying the state regulations and certain requirements such as companies selling firearms or the likes must maintain their licenses to carry out the business legally, etc.
Forming a legal and profitable business corporation may seem like a herculean task, but with patience and trust, coupled with the above-explained steps, mountain Everest will surely be moved. Also, there is nothing difficult to do in all the steps required to follow before forming a corporation, it will only take a business-minded individual to decipher them – without any problem.