If you are interested in incorporating your business, you may anticipate it to be a challenging, time-consuming process. While it’s true that each state has different rules and regulations for incorporating a business, the basic outline is the same.
We’ve spoken before about the specifics among each state, so we won’t go into that here. But we do want to talk about the steps you’ll need to take after you have established your state’s guidelines. What’s more, you can complete these steps all on your own.
You can, of course, hire an attorney if you prefer to let a trained professional handle your incorporation. With that said, not all new business owners have the business funding to hire a lawyer. That’s why we feel it is important to provide you with the necessary steps in incorporating your business.
Choose a Name
The first thing you want to do is come up with a business name. For many people, this is the hardest part of forming a business. For others, it comes quite naturally. However, just because you have a name picked out doesn’t mean that it’s going to be available.
As such, you need to be proactive in determining if your name is already being used. The easiest way to go about this is to visit your secretary of state’s website. In some states, you may need to go through your state’s business agency.
On these websites is a search engine that you can use to see if your business name is available. You can reserve the name if it is indeed free to use. However, it should be noted that this can slow down the application process since you will need to show proof of reservation.
If your preferred name is taken, you will have to get creative or choose the next best thing. On that note, it’s best not to get too attached to the first name that you have picked out, as there’s a chance that it is already in use.
Try to compile a list of potential names so that you have something to fall back on if your first choice isn’t available.
Create Your Governing Documents
If you are starting your own corporation, the associated governing documents are referred to as “corporate bylaws.” For LLCs, however, the associated documents are known as “LLC operating agreements.”
These bylaws and operating agreements aren’t necessarily filed with the state. Instead, they are designated for internal use and are used as formal guidelines pertaining to how your business operates, from everything from disputes to profits. For all this and more, you can turn to professional legal assistance when setting up a business, by looking out for top LLC formation service / registered agent - or view our dedicated reviews of Nolo, Rocket Lawyer, Zen Business, or Incfile, just to name a few.
If your business has more than one owner, these associated documents are going to be especially crucial in your business affairs. As such, you will need to schedule a meeting with any and all co-owners so that everyone is on the same page as to what these documents consist of and how they affect everyone.
Having an attorney draw up your bylaws and operating agreements is likely to be very costly. As a new business owner, you may prefer to use what money you have for other parts of your company. The great news is that there are plenty of pre-made templates available online that you can use to create your own business documents.
When you file paperwork with your state, this is when your corporation or LLC will actually form. If it’s more convenient for you, most states give you the option of filing your paperwork online. You’ll need to check your state’s website and search for articles of incorporation.
These are a simple PDF download that makes filling out the necessary documents quick and easy. Included with these documents will be detailed instructions that walk you through the completion process.
If you don’t want to or can’t submit your paperwork online, you can instead submit your paperwork in person, via fax, or mail. Submitting it in person and via the internet or fax is typically going to be the fastest, most efficient way of filing.
If you are in a hurry to establish your business as a legal corporation, you can usually pay a fee to expedite your application process. Furthermore, some states will file your paperwork instantly when you submit it online.
The information that you are required to include in the articles will vary from state to state. Typically, though, you’re going to need to provide basic information, including:
Names/addresses of directors/officers
Purpose of business
It’s important to note that you want to make doubly sure that you don’t leave any sections on the articles blank. If you run into something that doesn’t make sense, contact your local business agency, such as the secretary of state’s office.
They have staff on board who specialize in assisting business owners with filling out this paperwork. It’s also important to add that staff members will be happy (ideally) with helping you as long as the answers to your questions don’t constitute legal advice.
You will need to hire a lawyer if you run into anything that requires legal counsel. Government staff members will be sure to tell you if they can’t legally provide answers to certain questions.
Once your filed paperwork has been accepted by your state, you will be sent a receipt or certificate confirming that you are now the proud owner of a legal business in the United States.
Set up a Meeting
One of the most important goals of your company’s first official meeting should be to document the finances of your LLC or corporation. As such, you will need to take the time to record all of the names of your investors – those who gave money, services, or assets in exchange for partial ownership of your company.
What’s more, you will also need to include what percentage of your business each individual now owns. You can typically find this documentation within the bylaws for corporations and operating agreements for LLCs.
For LLCs, members will get a membership certificate, while corporation members will get a stock certificate. At the end of the meeting, you should have all relevant members sign the operating agreement or bylaws, as well as any business bank account resolutions and the like.
Get Your EIN
Most businesses are required to have a federal employer identification number, known as an EIN or FEIN. If you apply for your EIN using the IRS’s website, you can generally look forward to a fast and easy process. In fact, it is often instant, as it is done right then and there.
What’s more, you should have a pretty straightforward time filling out the necessary information on the form. You don’t need to have anything other than some basic information about your business and your social security number. You will likely need to know your fiscal calendar year, as well.
With this information on-hand, you can receive your EIN in no time at all. With this step completed and out of the way, it’s time to move on to the final step. This is an ongoing step, so it’s one that you will continue to take throughout the life of your business.
Continue Growing Your Business
As you can see from the steps detailed above, there isn’t a lot that’s needed to form your own LLC or corporation. Once you have received your certificate or receipt, it’s time to get busy. Throughout the life of your business, it’s important to stay on track and continue to work toward growing your business.
Unfortunately, some business owners think it’s time to take it easy once their business is legally established. Don’t fall into this trap. Take this time to work on ways to improve operations, branch out your marketing, and cater to new audiences.
You might want to consider hiring professionals who specialize in enhancing your business once you have enough capital. This can pay for itself many times over if used to its fullest potential. The key is to not become complacent.
Continue to work on new and exciting promotions and strategies to grow your brand. With plenty of research and hard work, you can retire comfortably one day due to the time and energy you put into your business early on.
Now that you know the steps needed to get the path to incorporating your business, you will have a much easier time turning your dream into a reality. With a basic understanding of your business and the necessary paperwork, you can get through the process quickly and efficiently.
If at any time you find yourself confused with any of the articles of incorporation, simply contact your secretary of state’s office (or local agency) for assistance. Their staff can provide you with basic information about what to do next so that there aren’t any issues with your application process.