Concepts in incorporating your business will become necessary when it's finally time to take the step and grow the business into an entity that is more than just something that is taking place as a pastime or when you've decided to go from a sole proprietorship to a business that will be hiring employees. Sole proprietorship's cannot hire employees. Other business types can.
You should carefully examine the pros and cons of structuring into any recognized business entity before deciding on the specific one. The LLC and S corporation are common options for the small business owner. If, after careful consideration, you have decided you'd like to incorporate your business you should know a few things and take a few steps in order to do so. First of all, you will need to choose your corporate name.
You will need to check to see if any other businesses out there have registered the name you'd like to incorporate under with the state in which you will be incorporating. If someone else has incorporated under that name you will not be allowed to take it. Additionally, each state has certain restrictions on name selection and usage.
Even if the name is available you still should be careful in selecting it. It can be a good idea to check with any county in which you are going to be doing business to see if there are any other companies using fictitious or "DBA" (doing business as) names that are the same as the one you intend to use. It can also be smart to check for any federal trademark registrations that exist in which you may infringe upon accidentally.
Most persons who will be incorporating their businesses go out and purchase a corporate kit which contains all of the paperwork necessary - including standard and recommended examples of bylaws, blank stock certificates, a corporate seal and other items -- before beginning the actual process of incorporation. Once obtained, you will need to choose the corporation's directors.
In most states, a corporation requires at least one director, which can be you in most instances. Also, you will need to choose a registered agent who will receive documents on behalf of the corporation. Additionally, you will need to begin the preparation of the articles of incorporation and the announcement of incorporation along with the drafting of bylaws and the first meeting of directors.
As was said, many of these steps can be taken by carefully following the instructions laid out in a "corporation kit." Take some time to go over the applicable securities laws in the state in which the corporation has been incorporated as well as those pertaining to the federal regulation of corporations. It is also highly recommended that you check with the state for any general licensing requirements your business will be to meet.
When taken all together -- and if one chooses to purchase a relatively inexpensive corporation kit -- the act of incorporating your business should be relatively straightforward and mostly stress-free. A corporation can make an ideal business entity under many circumstances and will also allow you to begin hiring employees as you grow your business towards even greater success in the future.
