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May 12, 2022 | Startup and Launch

What is the Role of an Incorporator?

Starting a new C Corporation can be complicated and entails several legal, administrative, and administrative steps. Whether you’re starting the business on your own, with a partner, as part of a team, or converting your current business structure to a corporation, it’s crucial that you accurately follow the guidelines established for incorporating in your home state. For that reason, some new business owners decide to hire a third party, such as a professional business formation company, for the role of an incorporator.

In simplest terms, the role of an incorporator is to prepare and file all the documentation required to form a corporation in the company’s home state. The incorporator can be an individual within the company, such as the owner, partner, board member, or an outside person, such as an attorney, or a professional business formation company, like CorpNet.

Read on to find out how choosing an incorporator can help you manage the most critical business processes.

What Does the Incorporator Do?

Because the steps for incorporating (and documentation required) vary by state, the role of the incorporator is to understand each state’s process to prepare and file the correct information. Incorporators carry out the important task of filing Articles of Incorporation and other entity formation documents necessary to form a corporation. Also called a Certificate of Incorporation, the document serves as the application for the corporation to legally conduct business in the state. Once the corporation is considered legal in the state, the company owners gain significant liability protection of their personal assets in case of lawsuits and debt collectors. From the moment of incorporation, the company is considered a separate entity from the business owners.

The primary role of the incorporator is to gather the information needed to submit the Articles of Incorporation, either online, by mail, or in person. Typically, the information required includes:

  • The name of the corporation (must be different and distinguishable from other registered businesses in the state)
  • Address of the corporation’s office within the state of registration
  • Name of the corporation’s registered agent and location
  • Whether the corporation is organized on a stock or non-stock basis
  • If organized on a stock basis, the initial classes of stock, number of authorized shares, and par values of shares
  • Name and address of each incorporator
  • Name and address of each member of the initial board of directors
  • Effective date requested (some states allow for a future effective date)
  • Purpose of the business
  • Whether the corporation is a cooperative
  • Whether the corporation is being formed as a benefit organization, and if so, what that public benefit is.
  • Duration of the corporation (while incorporators intend for their corporation to exist perpetually and continue indefinitely until formally dissolved, sometimes people form corporations for a distinct purpose and limited time)
  • Additional provisions
  • Incorporators’ signatures

Because each state has its own form, the information required may differ from one state to the next.

Once the incorporator has gathered and prepared the documentation, the form is submitted, and the filing fee is paid to the Secretary of State of that state.

Who Can Serve as an Incorporator?

Most states don’t restrict whom a business chooses to be its incorporator, as long as they are adults (18 or older). The role of an incorporator can be filled by in-house personnel, such as an owner/shareholder, a board member, an officer (president, treasurer, or secretary), or an outside entity such as an attorney or professional business formation company. But in fact, many business owners find it helpful to hire outside help so they can concentrate on the other critical steps required when launching a new company or managing an existing business.

Can a Corporation Employee or Officer be the Incorporator?

Yes, but that means they have to juggle their daily responsibilities of starting or running the company with the detailed tasks required of an incorporator.

What are the Advantages of Outsourcing the Role to a Professional Company?

While you can tackle the incorporation filing in-house, the task often creates a heavy burden and takes up valuable time navigating the process for the person given that responsibility. Outsourcing the role of the incorporator frees up company employees and officers to concentrate on essential company duties, such as building or managing a staff, marketing the business, increasing sales, etc. If the corporation is a new business, there are so many tasks that employees and officers need to pay attention to; adding the responsibility of taking on the role of an incorporator doesn’t make good business sense.

Another advantage is reducing the possibility of costly mistakes is another benefit of using a professional business formation firm, like CorpNet, in the role of the incorporator. Because they are unfamiliar with the process, business owners often make errors when preparing and filing the proper formation documentation. Professional incorporators have years of experience and know what each state requires and how to make the process hassle- and stress-free.

Why Should You Consider Using CorpNet?

CorpNet has been trusted by thousands of professionals and entrepreneurs across the United States. Using CorpNet is the smartest way to start a business and maintain compliance.

CorpNet offers customers:

  • Fast service
  • Efficient and easy processing
  • Reliable formation backed by a 100% guaranteed
  • Affordable services
  • Live experts available to answer questions and provide assistance

The business formation experts at CorpNet can file all the paperwork to help you start a business today. Whether you decide to form a C Corporation or simply File a DBA, our team of experts can file your paperwork quickly and affordably.

<a href="https://www.corpnet.com/blog/author/nellieakalp/" target="_self">Nellie Akalp</a>

Nellie Akalp

Nellie Akalp is an entrepreneur, small business expert, speaker, and mother of four amazing kids. As CEO of CorpNet.com, she has helped more than half a million entrepreneurs launch their businesses. Akalp is nationally recognized as one of the most prominent experts on small business legal matters, contributing frequently to outlets like Entrepreneur, Forbes, Huffington Post, Mashable, and Fox Small Business. A passionate entrepreneur herself, Akalp is committed to helping others take the reigns and dive into small business ownership. Through her public speaking, media appearances, and frequent blogging, she has developed a strong following within the small business community and has been honored as a Small Business Influencer Champion three years in a row.

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