Here are some simple steps to follow to form your own Limited Liability Corporation (LLC):
- Choose and reserve a corporate name that does not violates another business’s trademarks. Corporate name that sound or spelled similar to existing business cannot be used. Research with local secretary of State or Department of Commerce or Corporations Commissioner for local as well as foreign registered corporations for similar or existing corporations names hat may trademark infringe with your chosen corporate name.
- Select the appropriate corporate type such as unlimited shareholders “C, limited shareholders “S” , or professional corporation (for licensed professionals).
- Decide where your cooperation will be incorporated. You need to meet the state residency requirement. Generally, people set up corporate headquarters in states such as Nevada and Delaware where liberal corporate law and benefits apply. Typically chose state where you and other corporate members live.
- Create a pre-incorporation agreement that include shareholder names, incorporation state, corporate name, corporate purpose, number of shares to be issued, initial shareholder stock plan, and tax status.
- Create and file Article of Incorporation with the state. State corporate filing office has pre-printed forms. In this you need to include the Incorporator(s) or promoter(s) who is the person(s) responsible for creating the corporation and is responsible for accepting any legal papers served on the corporation. This includes number and types of shares to be held by shareholders. Preferred stock holders are guaranteed dividends before paid to common stock holders. Generally, small corporations usually compensate owners through salaries, bonuses and fringe benefits.
- Create corporate Bylaws based on state corporate life rules and allow owners to fill in rules to their discretion such as number of board directors, rules for shareholder meetings, governing voting procedures. This is not required to file during Article of Incorporation but need to be filled with the incorporation paperwork.
- State law requires to record minutes of your first board of directors organizational meeting. At this first recorded board meeting, board directors must elect salaried corporate officers for day to day business. Most state law require corporate officer include a President, Secretary and a Treasurer. However, most states allow all posts to be hold by the same person. Generally, this is acceptable for small corporations.
- With the state Department of Corporations, file a Notice of Stock Issuance that issue stock certificates to shareholders.
Follow those simple steps would help you easily setup your own small business corporation that you have been dreaming have a for long time.
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