There’s little you can do that’s more important than to protect your business by incorporating it. But so many entrepreneurs think the process of incorporating a business is complicated and so never bother with it. Nothing could be further from the truth. Here are six simple steps to help you incorporate.
Step 1: Conduct a Corporate Name Search
You first need to see if the name you want to use for your business isn’t used by anyone else. If it is, you’ll have to change the name slightly or choose a different state to incorporate in. We offer a free name search you can use to see if you can file your incorporation paperwork under the name you want.
Step 2: Choose Where You Want to Incorporate
The next step is to decide which state you will incorporate in. Many people choose to incorporate in Delaware because of its business-friendly environment. As a corporation in Delaware, you won’t pay state corporate income tax if your corporation was formed in Delaware but you do not transact business there (but there is a franchise tax). Still, it’s often easiest to incorporate in the state you operate out of. The decision is up to you.
Step 3: Draft Your Articles of Incorporation
Now you’ll need to file your Articles of Incorporation, also known as Certificate of Incorporation or Articles of Organization.
This is an essential document to set up your corporation. You’ll need to fill in details about the nature of your business, its Board of Directors, and contact information.
Step 4: Mail-in Your Incorporation Documents
If you’re doing your own incorporating and aren’t in a hurry to incorporate, you can file the paperwork yourself with your Secretary of State office. If you’re in a hurry to form a corporation, you can work with a document filing company like CorpNet who can rush your filing as fast as an hour.
Step 5: Apply for an Employer Identification Number
Once you are approved as a corporation, you will need an Employer Identification Number, which is kind of like a social security number for your corporation and will be used when you file taxes and business documents. You’ll also need it to open a business bank account, so once you get your EIN, go ahead and apply for that business bank account.
Step 6: Wrap Up the Rest
As you wait for your incorporation paperwork to be complete (or if you rushed it and it already is complete), take care of a few final steps. First, draft your bylaws. This document will outline how you will run your business day-to-day, including how your Board of Directors will be elected, and how frequently, how and where meetings will be held, and the duties of officers or Board members.
If your business requires business licenses or permits, apply for those now as well. You may also need to obtain a sales tax certificate if it’s required in your city or state.
Now That You’re Approved…
Congratulations on incorporating a business! If you plan to issue shares, you can do that at this point, as well as seek funding from investors who only work with incorporated businesses.
To remain compliant with your corporation, you may need to submit an Annual Report and possibly pay franchise tax fees each year. You will also need to keep Minutes at each Board meeting to have an accurate record of all business decisions the Board makes.
Get help preparing and filing all the paperwork needed to incorporate your business with CorpNet’s Start a Business Services.