How to Start a Corporation Without a Lawyer for Less Than $100

Starting your own business can provide between numerous legal tax deductions while creating a layer of protection between your assets and any current or future liability. The rules vary from state to state, but if you’re earning more than $40,000 per year, there is definitely room in your portfolio for controlling stock in your own corporation.

Instructions

Difficulty: Challenging

1. Create a name for your new corporation. “Your name and Associates Inc." will work fine. Or if you have a business purpose in mind, you can create a name that you can use in your business. However, if the corporation’s name is the same as yours, you will be able to move money back and forth between your personal and business accounts more easily.
2. Google the word "corporation" and download the articles of incorporation for your state. If you are interested in avoiding state corporation taxes, use a state like Nevada or Delaware to register your corporation. Since you do not reside in these states, you will need a resident there to serve as your registered agent. This will cost you extra money, though often as little as $100. You can find people in these states, sometimes attorneys or CPAs, who already offer this service.
3. Create a file with your own articles of incorporation from the samples you downloaded.
4. Decide what kind of corporation you will create. It is easy to find explanations and advantages for each type of corporation.
5. Call the Secretary of State’s office in the state you are incorporating in and find out the procedure and fee for incorporating. Then mail in your articles with the application fee. Many states now allow this to be done online. You will be required to name the officers of the corporation in this document. Once the state approves your articles, they will send you a certified copy.
6. Apply to the IRS online to get a Federal Tax ID number. However, you will need to provide a physical street address in order to have the number issued. You may prefer to use your attorney’s address or your business address rather than your home.
7. Buy some books that explain how to keep minutes for corporate board of director meetings and organization. Also get a copy of the IRS rules for filing. You can actually download or purchase blank forms for everything from stock certificates to meeting minutes.
8. Now for the difficult step. You will need to take your EIN (tax ID) and a copy of your articles to a bank to open a business checking account in the name of your corporation. There is no point in owning a corporation if it doesn’t conduct some kind of business with an active checking account. Banks are much more difficult to deal with since the Patriot Act was enacted, so be prepared to answer some questions and provide reasonable and compelling explanations about why you are starting the corporation.
9. Keep good records. They can be simple, but you want to be able to produce legal documentation for activities performed by the corporation to protect the funds that it raises and disperses. Many people run most of the activities in their lives through their corporations, ranging from buying of homes, cars and other vehicles to paying for all their traveling.