A corporation is a form of business ownership that prevents personal liability for business debts. Much like an individual, a corporation can enter into contracts, own assets, pay taxes, loan and borrow money, and sue and be sued. Incorporating your business can be a huge benefit to your company but the process is often complicated. To ensure that you follow all of your state’s legal requirements in the incorporation process, it is essential to consult experienced business lawyers who can help you every step of the way. There are several critical steps that must be taken to form a corporation: Choose a name. Your business name cannot be the same as the name of another corporation on file with the state’s corporations office. The corporation's name may also have to include an identifying word such as "incorporated," "limited," "corporation," or an abbreviation of such terms. Once you've found a legal and available name, you must also file a fictitious or assumed name statement with the state or county where your business is located. Create bylaws. The formation of a corporation also requires that you create bylaws. Bylaws are the internal laws of your corporation which will deal with day-to-day decisions. To ensure the legality and effectiveness of your corporation’s bylaws, they should be drafted by qualified business lawyers. Create a shareholders' agreement. Another important step is the signing of an agreement for the transfer of ownership in the event that the owner becomes disabled, dies, retires or decides to leave the corporation. It is important to have an experienced lawyer frame and evaluate these agreements Choose directors for your corporation. Directors make major decisions for the corporation, such as authorizing the issuance of stock, appointing corporate officers and approving loans to and from the corporation. They are usually appointed by the initial owners of the corporation before the business opens. Owners may simply appoint themselves to be directors. It is important to enlist the help of competent business lawyers who are well-versed in the laws of your state. Create and sign articles of incorporation. Prepare and file "articles of incorporation" with your state's corporations office, which is usually the department or secretary of state's office located in your state's capital city. Hold your first meeting of the board of directors. Directors need to hold an initial board meeting to handle a few corporate formalities and make important decisions, including:
Issue Stock. It is not advisable to do business as a corporation until you have issued shares of stock. Issuing shares of stock divides ownership interests in the business.It can be complicated and must be done in accordance with securities laws. Most small corporations qualify for exemptions from securities registration. Experienced business lawyers can provide invaluable help with this step. Prepare and issue stock certificates. In some states you may also have to file a "notice of stock transaction" or similar form with your state corporations office. Incorporating your business will not only protect assets and offer opportunities for continued success; with the help of skilled business lawyers, it can provide a pathway to realizing your dreams. Carosella & Associates can help you with this critical stage in your new business.
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