Tips on Forming a Corporation

meeting of team of business people

If you are starting a new business and you are thinking about setting it up as a corporation, you should confer with a knowledgeable and experienced business attorney. The structure you use for your company will impact every aspect of it, so it is essential that you pick the most beneficial type of entity available to you. Below are a few considerations when forming a corporation:

Every state has its own rules for naming a corporation, but a few general rules include:

It is essential that you research the proposed business name. In fact, you should strongly consider paying a small fee to reserve your corporate name while you are completing your filing to ensure you do not lose it. You should also confirm that your company name will not infringe on another party’s trademark.

A board of directors must be appointed to make the financial and policy decisions for the corporation. In most cases, the directors are appointed by the initial owners or shareholders of the corporation before any business is conducted. An owner can be a director, but director does not have to be an owner.

To register your business with the state, a corporation must file articles of incorporation which are also referred to as the certificate of incorporation. If there are other names associated with your corporation, you should file a fictitious name statement also.

A corporation should have a set of bylaws which outline the rules which govern the internal operation of the business. You should consult with a business attorney for assistance in drafting bylaws.

If there is more than one shareholder in the corporation, it is important to have a shareholder’s agreement. This type of contract sets forth what happens if an owner dies, becomes disabled or leaves the corporation.

The above are examples of the initial tasks that must be handled when forming a corporation. However, there are a variety of other things that should be done such as having the first meeting of the directors, issuing shares of stock and determining if your business is eligible for exemptions from securities registration requirements. You should also verify that your corporation has obtained the required licenses and permits to legally operate the business.

The above are just a few examples of issues an attorney can help you with when starting a new company. Obtaining the right advice from the start can significantly increase the likelihood of your business being a success. Contact The Swenson Law Firm for help.

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