Incorporate A Business Without Spending the Mother Lode
More and more entrepreneurs and business owners these days are studying their options and choosing to structure their companies as corporations. But it can be an overwhelming experience… both to your intellect and to your wallet.
More and more entrepreneurs and business owners these days are studying their options and choosing to structure their companies as corporations. But it can be an overwhelming experience… both to your intellect and to your wallet. If you are starting a small business or you are thinking of incorporating your existing business, you may have seen promotions for low fee online incorporation services. You may wonder - How good are these services? Can incorporating online really save attorney fees? When using one of these services to incorporate a business, will it be legal in your state? Can you save even more by doing everything yourself instead of using an online incorporation service?
Incorporate a Business…The Advantages
While incorporation requires more paperwork and expense than a sole proprietorship or a partnership, it offers important legal and tax advantages.
1. Personal Asset Protection
As a separate legal entity, a corporation is responsible for its own debts so that means creditors of a corporation can seek payment only from the assets of the corporation - and not from the personal assets of shareholders, directors and officers.
2. Easier Access to Capital
Raising capital is generally easier for a corporation, since a corporation can issue shares of stock. And, if you’re in the market for a bank loan, banks would rather lend money to corporations than to unincorporated business ventures.
3. Business Credibility
Having “Inc.” or “Corp.” following your business name generally conveys permanence and stability, communicating your commitment to the ongoing success of your business venture.
4. Perpetual Existence
A corporation can continue indefinitely, regardless of what happens to directors, officers, managers, or shareholders, which may enable you to avoid the legal entanglements that might occur with other business structures.
5. Anonymity of Ownership
If you want to open a small business and don’t want your involvement to be public knowledge, your best choice may be to incorporate.
Did you know - In order to create a corporation, articles of incorporation need to be filed with the Secretary of State. Next, bylaws and organizing resolutions must be adopted. A corporation will also need to apply for a tax identification number with the IRS. If you use an online incorporating service, make sure you research them thoroughly. Some incorporation services will only create and file the articles of incorporation, but you’ll find others who can prepare and complete all of the required documents for you, including customized bylaws and organizational resolutions. Be diligent in your research, and you’ll reap the rewards.
Just a Click Away
You may find much of what you need to incorporate a business with just a few clicks of your mouse. For instance, many online sites now offer sample articles of incorporation forms or templates for a nominal fee. Simply go to your favorite search engine and search for “incorporation template,” “incorporation form,” or “sample articles of incorporation.” You’ll find a number of choices with prices ranging from free for sample “articles of incorporation” to $50 for a customizeable template. Although the price may be right, be advised that this satisfies just one part of the process when you incorporate a business. To be sure, it does not address filing fees (how much and where to file), franchise fees, whether you need a business license, how your state treats foreign corporations, etc.
Alternatively, once you decide in what state to incorporate a business, all you need to do is visit the Secretary of State section of that state’s government website. Most of these websites have sections called Corporate Bureau, Corporation Commission, Bureau of Corporations, or something similar. There you will find the forms you need for incorporating a business along with complete instructions on what is needed to incorporate a business in their state. And many states now offer online incorporation! What’s easier than that?
To incorporate a business is a wise decision for many, and yet many avoid taking the necessary steps for fear of a costly and complicated process. In truth it is not the overwhelming prospect it might at first seem. Besides, there are a multitude of resources available (many of these on the Internet) to help you through the process. Do some research for a full disclosure of the process and make an informed decision about whether incorporating a business is right for you.
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About the Author:
Nate Smith is one of today’s premier experts in saving time and money on common legal matters. Forget the huge attorney fees, Nate will show you how you can incorporate a business, draw up a will, obtain a registered trademark, create a living will, and more, while saving your hard-earned dollars in the process. For more information on how to save money on legal issues, please visit LegalDocumentsWeb.com at http://LegalDocumentsWeb.com.
