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How to Become a Corporation

Contributor
By Robert Fears
eHow Contributing Writer
(0 Ratings)
A corporation involves a group of people.
A corporation involves a group of people.
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To become a corporation, a list of procedures must be followed. Although there are several types of corporations, only the general corporation will be discussed here. The general corporation is also know as a "C" corporation and a domestic corporation. The biggest advantage of a corporation is that it is a separate legal entity and assumes its own liabilities. This limits owner and stockholder liability exposure.

From Quick Guide: Incorporation Basics
Difficulty: Moderate
Instructions

Things You'll Need:

  • Attorney
  1. Step 1
    Choose a name that looks good on a business card.
     
    Choose a name that looks good on a business card.

    Select a corporate name that is easy to understand, can be easily located in the telephone book, portrays your desired image of the company and is not similar or identical to the name of another business. The corporate name needs to be registered with the proper authorities. In most states, it is the county clerk's office, and usually the registration fee is between $8 and $10.

  2. Step 2
    Candidates for the Board of Directors need to be carefully considered.
     
    Candidates for the Board of Directors need to be carefully considered.

    Appoint directors for your corporation---owners, family members, friends or needed experts. A general corporation can have any number of directors, but you should be comfortable with them making major policy and financial decisions for the company. Duties of the board of directors include authorizing the issuance of stock, appointing corporate officers and determining their salaries and approving loans to and from the corporation.

  3. Step 3
    Articles of incorporation must be filed with the state.
     
    Articles of incorporation must be filed with the state.

    Write the articles of incorporation, and file them with the appropriate state office. Filling fees usually vary from $100 to $800.

  4. Step 4
    Draft by-laws for your corporation.
     
    Draft by-laws for your corporation.

    Draft the corporate by-laws that need to describe when and where the board of directors and shareholder meetings will be held. They also should include the voting required for directors and shareholders. You might want to hire an attorney to write the articles of incorporation and the by-laws.

  5. Step 5
    Appoint corporate officers at the first board meeting.
     
    Appoint corporate officers at the first board meeting.

    Conduct the first meeting of the board of directors. Business at this meeting should include setting the corporation's fiscal or accounting year, appointment of the corporate officers, adoption of the by-laws, authorization of stock issues and adoption the official stock certificate form and corporate seal.

  6. Step 6
    The board issues stock.
     
    The board issues stock.

    Issue stock certificates before doing any business as the corporation.

  7. Step 7
    Obtain necessary licenses and permits.
     
    Obtain necessary licenses and permits.

    Obtain licenses and permits that are required for your business. You will probably need a business license, also known as a tax registration certificate, and an employer identification number from the Internal Revenue Service. Other documents that may be needed include a zoning permit and a seller's permit.

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