Business is to earn profit. To earn profits you have to assume risks. These are the two basic tenets of business-for-profit. As man is wont to, we innovate and form new practices. Now it is possible to do business with limited risks. Limited Liability for business owners in their business obligation is a legally accepted fact. Corporations and Limited Liability Companies are taken for granted in the ordinary course of life. These business structures are meant for operating considerable business with limited liability to the business owners. Limited Liability Company is an advanced form of a general partnership. The only difference is that the partners or members as they are termed in an LLC, have limited personal liability towards the business debts or obligations. This does not mean that by forming an LLC or a Corporation one is scot free to do anything they wish. Criminal acts or wilful negligence is still punishable under the law.
Corporations have become the most common legal business structure for budding entrepreneurs with a vision to grow. Small business incorporation is now easy with states encouraging small business operators. States are actively soliciting entrepreneurs to start business in their territory by simplifying formation procedures and formalities. Some states even provide tax holidays or subsidies for niche businesses. To know how to incorporate yourself, all you need to do is get in touch with the agency handling business registrations in your state. Usually this is handled by the Secretary of the state’s or Corporations Commissioners offices.
There are a few basic rules on how to form a corporation. First step is to find a name for you to incorporate under. Care is needed in doing this. You cannot use a name which is identical or closely similar to that of any existing business. You will have to check with the agency handling corporations in your state and the corporations register to make sure that the name chosen is available for use. Then you file an Articles of Incorporation paying the due fees. The Article is usually a pre-printed form which should be filled in and signed by the incorporator or the promoter of the business. It will contain the basic information about the corporation and its functions. A bylaw of the corporation to set the rules and policies for the operation of business is a necessity. It will act as a guide to the directors and office holders of the corporation in executing their duties and handling their responsibilities.
The articles of incorporation are required for a c corp and an s corp. The article of incorporation is required by all states and is used as a charter for your business. The articles of incorporation are designed to establish the existence of your corporation, which is done by filing your articles of incorporation in the state that you are incorporating in. The articles of incorporation are also designed to provide the public about certain basic information for your corporation.
When preparing the articles of incorporation you can use corporate kits or you can find a sample online and create your own articles of incorporation. When preparing your own articles of incorporation it is imperative that you include certain things, if these things are not included in the articles of incorporation, you will not be able to file your articles of incorporation with the Sectary of State’s office.
The first thing that you need to include within your articles of incorporation is the name and address of the new corporation. When including the address you want to give the address of where you will be doing the most business. For example, if you will be running an internet business from your home you will want to give them your home address.
The second thing that you need to include in the articles of incorporation is the purpose of your corporation. When stating your corporation’s purpose you want to use broad language. The reason for that is if you do not use broad terms to describe what your corporation is doing you can limit what your corporation can do. For example, if you state your corporation is going to be selling corporate business gifts to other businesses you will not be able to sell to the public. Instead, you want to use a term like sell quality corporate business gifts to people and businesses that might have a need for them.
The third thing that must be included in your articles of incorporation is the name and address of your corporation’s registered agent. The registered agent is anybody in your corporation who is authorized to accept legal documents on the corporation’s behalf. For example, if your corporation is ever involved in a lawsuit the registered agent will be the person who is served with the papers.
The fourth and final requirement for your articles of incorporation is the stock information. With the stock information, you will want to include the type of stock that you will be issuing and the value of each share. You also want to include how many shares of stock your corporation is allowed to issue, if offering different types of stock you want to include how many shares of each type of stock you will be issuing.
While those are, the main requirements that you will need to have for the articles of incorporation you can still include other information about your corporation in general. Most articles of incorporation include the identity of the people who started the corporation. You can also include the identity of the director or directors. Whoever is identified in the articles of incorporation for being in charge of the corporation must sign the articles of incorporation before they are filed.
With how important the articles of incorporation are for your business it is imperative that you get them right. If you do not feel like you can prepare the articles of incorporation, yourself it is imperative that you get somebody, such as a corporate law firm to help you prepare the articles of incorporation. Corporate law firms are nice to use because they can help save you valuable time, which gets your corporation up and running sooner.
