How to Setup a Corporation
There are several ways to set up businesses, and one method is through the formation of a corporation. There are two main benefits to setting up a corporation. The first is that you can allow people to invest in your business, which provides more capital. The second is that the business is completely separate from your personal income as far as the law is concerned. That means if someone sues the business, your personal assets are protected. Although setting up a corporation may be a time-consuming process, the actual steps are not difficult.
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Instructions
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Decide on a name for your corporation and check to see if it is available. Look up the name at your state's licensing office and check the federal trademark database at http://www.uspto.gov to check availability.
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Register an "Assumed Business Name" with your county licensing office if your business name is something other than your personal name. Go to the county licensing office and look up the business name to see if someone else has already registered it. Look through actual registration books, as well as an online database. If the name is not in use, complete the paperwork provided to you by the licensing office. Pay a small fee to register the name and begin using it.
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Decide which state(s) you will do business in. Although you can register the corporation in any state, it is much easier and cheaper to register in your own state because other states can impose additional regulations and taxes on out-of- state corporations.
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Choose the board of directors for your organization. Together, these people will draw up the bylaws of the corporation, which explain the operating methods and procedures for the company.
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Choose the investors (if any) for your business. If you have investors, you must also draw up a "Shareholder's Agreement" that dictates the number of shares and type of stock the company will issue.
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Go to the Secretary of State's office, submit all of the documents created along with the Articles of Incorporation and tell them you want to setup a corporation. You will be directed to the correct department, which is usually called the "Corporations Division." Give them the paperwork and pay a filing fee which varies by state. You will receive an official "certificate of incorporation" within two weeks.
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Tips & Warnings
If you plan on conducting business in another state, file a "Certificate of Authority for Foreign Corporation" with the other state's licensing department rather than incorporating in that state.
