Planning and Preparation
Decide on the Business Structure
Choose between a corporation (C Corp, S Corp) or limited liability company (LLC), depending on your goals and tax preferences.
Choose a Business Name
Ensure the name is unique and complies with state or national naming regulations.
Check trademark availability to avoid intellectual property issues.
Conduct a Business Name Search
Also read:
- https://nexgenlegalaid.com/what-are-the-30-most-common-corporate-legal-pitfalls/
- https://nexgenlegalaid.com/40-questions-to-ask-your-lawyer-before-signing-a-corporate-contract/
- https://nexgenlegalaid.com/20-key-compliance-issues-every-business-owner-should-know-in-corporate-law/
Verify the name’s availability through your jurisdiction’s business registry.
Reserve the Business Name (Optional)
Reserve the name if your jurisdiction allows and you’re not ready to file incorporation documents immediately.
Documentation and Legal Formalities
Appoint a Registered Agent
Select an individual or entity authorized to receive legal documents on behalf of your business.
Draft Articles of Incorporation
Prepare foundational documents that include:
Business name.
Address.
Purpose.
Registered agent details.
Number and type of shares (for corporations).
Prepare an Operating Agreement or Corporate Bylaws
For LLCs: An operating agreement outlines ownership and management structure.
For businesses: Corporate bylaws outline internal management procedures.
File Articles of Incorporation
File the articles of incorporation with the appropriate state or national agency and pay the filing fee.
Obtain an Employer Identification Number (EIN)
Register with tax authorities to obtain an EIN for tax and hiring purposes.
Regulatory and Licensing Compliance
Apply for Business Licenses
Obtain any local, state, or national permits specific to your industry.
Register for State Taxes
Register the business for state-specific income, sales, and employment taxes.
Open Business Checking Account
Use a separate account for your corporation or LLC to separate personal finances from corporate finances.
Governance and Ownership
Issue Stock or Membership Certificates
Corporations:
Issue stock certificates to those shareholders on its organizational documents.
LLCs:
Record ownership percentages or units through an operating agreement.
Identify your Director
Corporations:
Organize a board of directors at the initial organizational meeting.
For LLCs: Choose managers if the LLC is a manager-managed LLC.
Conduct an Organizational Meeting
Approve bylaws or operating agreements.
Record the meeting minutes as part of corporate record-keeping.
Obtain a Corporate Seal (Optional)
Certain jurisdictions require a seal or its use is suggested to authenticate company documents.
Compliance and Record Keeping
Registration with State and Local Agencies
File other supporting documents that require compliance, including zoning or environmental permits.
Obtain Employer Compliance
Comply with labor laws, which include the setting up of payroll, workers’ compensation insurance, and employee benefits.
Corporate Records
Distribute meeting minutes and resolutions; detail financial transactions
Initial Reports
File any required initial reports or disclosures with your jurisdiction’s agency (e.g., a statement of information)
Insurance
Business liability, property, and other types of insurance to cover your business
Brand and Intellectual Property Protection
Trademark Your Business Name or Logo
File for a trademark to safeguard your brand identity against infringement.
Domain Name Registration
Ensure a strong online presence for your business by buying relevant domain names.
Scaling and Growth
Prepare a Business Plan
Create a comprehensive plan of growth, funding, and operations.
Consult Legal and Financial Experts
Seek advice from attorneys and financial advisors to guarantee long-term compliance and success.
Conclusion
Business incorporation involves careful planning, legal compliance, and detail-oriented steps. Following these 25 steps can give you a strong foundation for a legally compliant and successful business. Always seek advice from a corporate attorney or legal advisor for jurisdiction-specific requirements.