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Are you looking to start a corporation?
Perhaps the goal is to hire employees, or you want to exercise more control over financial transactions. You may also just be hoping that your business is more successful and accumulates more revenue.
Although your end goal is clear, you might be overwhelmed by the process of how to start a corporation, and how to do it successfully. Luckily, there’s some clarity to come on these issues as you continue reading down this page.
Registering Your Business Name
Before you can start a corporation, you must first name your corporation and register. This can be done by going to the Secretary of State’s website and searching for your desired name. If the name is available, you can then register it by paying the required fee.
Once your name is registered, you can then proceed with incorporating your business.
Filing for a Certificate of Incorporation
File for a Certificate of Incorporation with the state in which the corporation will be operated. This document will officially establish the corporation and its legal status.
Once the Certificate of Incorporation is filed, the next step is to obtain an EIN or Federal Employer Identification Number from the IRS. This number will be used by the corporation for tax purposes.
Creating Bylaws for Your Corporation
in order to maintain control and power within the company, bylaws must be created. The bylaws will outline the rules and regulations of the corporation. They will also detail how the company will be run, including how decisions will be made, how shareholders will be compensated, and how the company will be structured.
Appointing Directors and Officers
A corporation is a legal entity that is separate and distinct from its owners, that is why there is a need to appoint directors and officers.
Directors are responsible for the overall management. They make major decisions, such as deciding to issue new shares and hire and fire employees.
Officers are responsible for the day-to-day operations. They carry out the decisions of the directors and manage the employees.
The secretary is responsible for keeping records and minutes of meetings, and the treasurer is responsible for the corporation’s finances.
Once your it is up and running, be sure to comply with all state and federal regulations and corporate formalities to raise the corporate veil. This will help protect directors, officers, and shareholders from personal liability and provide tax benefits.
Holding Your First Board of Directors Meeting
A board of directors is a group of individuals who, as a whole, oversee the management of a corporation. The board may delegate some of its authority to committees made up of board members. The board of directors meeting is the opportunity for the board to guide the corporation towards its goals.
At the first board of directors meeting, the board will elect a president, secretary, and treasurer. The board will also adopt bylaws and discuss the business plan. After the meeting, the board will be able to start working on behalf of the corporation.
A Word of Caution Before Deciding to Start a Corporation
To sum it up, to start a corporation is a complex and lengthy process. There are many important steps to take and considerations to make along the way. This article has outlined some of the key points and keeping it.
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