Forming a corporation can be a daunting prospect for a new business owner, but it is fundamentally an easy process. You can choose to go it alone, using tutorials and self-help guides; or you can opt to ask the professionals to help you with the process.
The first step in forming a corporation is to pick a company name. Conducting a detailed search on the internet will give you an idea of names that are already taken. The name must also end with words such as Corporation and Limited. Once you have picked a name you are then ready to move on to the next step.
After picking the name, you then need to appoint the Members of the Board and the Directors of you company. Depending on where you do business there may be a stipulated amount of directors or board members needed in the company. These positions will need to be decided before you can fill out any registration paperwork.
After this stage, you can fill out the paperwork which can be obtained from the corporation filing office. The details you need to provide will include the name of your business, the address of your company and sometimes the names of the elected directors and board members. You may also need to provide the name of the registered agent. This is the person who is the public face of your company; someone who the public can contact in the event of a legal wrangle.
The next stage in forming a corporation requires you to create corporation bylaws. These usually set out the rules that the company will follow, as well as details of any shareholder annual meetings. It is then recommended that the directors hold a meeting to establish rules and authorize the release of stocks and shares.
This then leaves the final stages of forming a corporation which are the issuing the stocks of shares and obtaining an EIN (Employee Identification Number). Once this is complete you are more or less ready to start trading as a corporation.
If this all seems a bit too much, there is the option of purchasing ready made companies. There are providers out there who have already registered companies and are willing to sell them to you for a reasonable price. The price that you will pay for ready made companies is usually determined by the age and name of that company.
If forming a corporation is something you would like to do it has a range of benefits such as lower tax rates and protection from creditors for shareholders. This is applicable as long as you uphold the rules of the corporation and do not break the law.