How to Incorporate
The process of incorporating is quite simple, regardless of how you do it, through an attorney, an online document filing service or performed yourself; there is a common process to follow, here’s what you want to keep in mind on how to incorporate your business:
- Choose a corporate name and identifier
- Name availability check
- Prepare and file articles of incorporation with the state office
- Pay state filing fees
This is the actual process to “incorporate”, which is no more than filing articles of incorporation or formation with the state office, is by itself, quite simple. There are post incorporation items that will be part of the overall process, such as:
- Electing tax status with the IRS
- Obtaining an employer identification number
- Opening a bank account
- Starting a corporate record book
- Trademark or patent preparation
- Domain name registrations
Each business will be a slightly different process and depending on the type of entity formed, for limited partnerships and liability companies, creating the operating agreement, partnership agreements and proprietary documents will be an important component to the post incorporation process.
- Choosing a corporate name
The choice of name must conform to a few specific requirements. Namely disallowed words and the corporate identifier. A Corporate identifier is a part of the entity name, such as “incorporated” “corporation” “company”, “llc”, “ltd”, “limited” or an acceptable abbreviation of these. Your chosen name cannot be exact or too similar to an already incorporated business within the same state. The name you choose for your company must not be an attempt to capitalize on the reputation identity of another registered business. Having your name trademarked will allow you to use it in all fifty states. Some other considerations to take into account are:
- The corporate name can’t imply affiliation with a religious, charitable, veteran, or professional organization without that tie being officially certified in writing.
- The corporate name can’t be misleading, meaning you can’t have the phrase, “bank” in your corporate name if the company has not satisfied state requirements for incorporating as a bank.
- One or two alternate names should be chosen to provide another option if your first choice in name is taken.
- Check the availability of the name choice
The name you choose for your business needs to be checked with the state you are incorporating before you file your articles of incorporation. This is an area where a professional service can save you time by leveraging their relationship with the state. If you file any documents with a name that has already been taken, the filing will be rejected. To check availability, you can use name checks by phone, if available, or check your state’s website and perform a public records search online
- Use name check via phone if available in the state you are incorporating in
- Check name availability before filing articles of incorporation
- Use a professional filing service
- File the required documents
The prepared documents that you must file in order to incorporate may be known as the “articles of incorporation” “articles of organization” “charter” or “certificate of incorporation” depending on your state. The articles are filed with your secretary of state office, or other business regulatory agency. Some states require that the articles of incorporation be filed with another informational form.
- File your completed articles of incorporation
- Type the forms so they can be recorded clearly
- Decide on the corporations’ registered agent-you need to appoint a person to accept legal documents at a legal address on behalf of the company.
- Additional Organizational Matters
Following the filing of the articles of incorporation, you must tidy up a few important details to complete the organization of your corporation. The articles of incorporation filed with the state must be officially adopted by your company, bylaws need to be adopted (for corporations), operating or partnership agreements (for limited partnerships and liability companies), officers elected, stock issued, and a corporate seal approved. Usually, these actions occur at the organizational meeting. At this meeting the proposed directors, officers, and shareholders make decisions on these organizational matters. The decisions are then recorded as “minutes” of the meeting.
- Adopt articles of incorporation
- Adopt bylaws or agreements
- Elect offices such as president, vice-president, secretary, and treasurer
- Issue stock
- Approve corporate seal
- Prepare Corporate Records
A corporation is required to maintain very detailed records of the activities the business commences. You will thank yourself for keeping those meticulous records if the unthinkable ever occurs, and you have the IRS wanting to look at your corporate records. Banks will also want to see your corporate records in order to secure funding for the corporation. This record keeping is vital as it is the proof that your company is properly maintained and organized.
- Begin and maintain detailed corporate records
- Detailed records demonstrate that the company is organized and operated correctly
Now that you are aware of the incorporation filing and post incorporation process, you must decide who you will entrust with the task. Obviously you can make the decision to do all of the legwork yourself at some costs. Attorneys might be another option at a much higher price point.
Choosing a legal document preparation and filing agency, typically, is the fastest and easiest way to incorporate. The reputable professional agencies even have options available to them such as electronic filing that can greatly expedite the incorporation process.
Companies Incorporated files hundreds of documents a week, nationwide and is the highest rated incorporator in customer satisfaction.