The business world isn’t the easiest to navigate. For many entrepreneurs, the path to starting a successful company doesn’t come easy. As there are many ways to launch your own company, it’s important to find the best path for you.
The Path to Incorporation
Incorporating your business will help you in the long run when it comes time to pay your taxes. When starting your own business, one of the most important factors to consider is the type of business structure you hope to use. While many entrepreneurs open a small business without ever incorporating it, this isn’t always the best decision. Read on to learn important tips and tricks when it comes time to incorporate your business.
1. Choose Your Name
When creating your business, it’s important to carefully consider the business’s name. Before incorporating, you’ll need to make sure this name isn’t already in use. While most states have databases that include names that are already in use. Use these databases to determine if your business’ name is viable. This information is typically found through the secretary of state’s website.
As you search to confirm that your business’s name is unique to you, remember that most states only give business owners the option to reserve the name. Keep running searches until you settle on a name that hasn’t been used already.
2. Create Governing Documents
After checking to see if your name is already registered, it’s important to begin the process of creating governing documents. As you incorporate your business, these governing documents act as corporate bylaws. If your corporation or company has multiple owners, this type of agreement is especially important. Make sure both owners are clear on the information that is to be included in the agreement.
Creating your governing documents can be a tedious process. Thankfully, a corporation formation service can help business owners that want to get the more challenging aspects of corporation formation out of the way. Working with these services will help you focus on running your business while they handle the responsibility of making your company a corporation.
3. File the Paperwork
Filing your business paperwork with your state is the next step to incorporating your company. Most states’ websites offer downloadable copies of the articles of organization or articles of incorporation. Other states make it easy for business owners to file online as well.
Typically, there are four ways to submit one’s articles of incorporation: by fax, online, by email, or in person. If you’re hoping to complete the process as quickly as possible, it’s best to do the process online or in-person. To file this paperwork, you’ll need pertinent information like the name of your company, the registered address and agent name, the purpose, and mailing address, as well as the addresses and names of the other managers or members of your company.
4. Hold Your First Official Meetings
As a newly incorporated business, it’s important to hold regular meetings. The first official meeting serves to document how you plan to fund your corporation or LLC. During this meeting, it’s essential to record pertinent information like the names of individuals that change assets or money for partial ownership of the company in addition to the number of shares they have in the company.
This type of documentation is often on the operating agreement, as well as in the business’ bylaws. Typically, LLC members receive membership certificates while corporations offer stock certificates. As the meeting comes to a close, make sure everyone signs the operating agreement or bylaws.
5. Obtain an EIN
Most businesses need an EIN or federal employer identification number. Applying for this number is relatively simple and typically instant through the IRS’ website. Simply fill out the form, sign your SSN, choose the type of business entity that you’re forming, and include the fiscal calendar year.
Don’t skip out on incorporation. While the process itself can be complicated, successfully incorporating your business is an important step for your company. Use this guide as you start on the path to taking your business to the next level.