What Type of Paperwork is Involved?

To become incorporated, you must choose and register a name for your business, as well as a business address. Next, you will decide what type of structure to give your corporation. You can choose between a limited liability company, an S-corporation or a C-corporation. There are benefits and drawbacks to each type of corporation, and you should read the requirements for each carefully to be sure that your company qualifies under the structure that you want it placed.

One of the most time consuming aspects of establishing a corporation is drawing up the by-laws. While you may have a set of by-laws already established that set in place the structure of your business, they will probably need to be rewritten. They must adhere to the standards required by your state before incorporating, and the information they must contain is very specific.

The next step, naming a board of directors, can be sensitive. It is at this point that many people realize the control that they are giving up. If your company already has a group of leaders, setting up the board of directors can be relatively simple. If you are a sole proprietorship, handing over control of your business to a group of people can be very difficult. If this is a problem, check your state regulations, you may not be required to have a board of directors if you form an LLC.

After you complete the paperwork, you are ready to pay the incorporation fee and become a corporation. If, after you begin the process, you find it too complicated or time consuming, you can always hire a professional for part or all of the remainder. Hiring someone to write by-laws or research prospective board of directors may be worth the expense to have the job complete. Since you will be reviewing the work yourself, it will not be necessary to hire an attorney to complete these tasks, and the money saved will be substantial.

Note that maintaining your corporation on an ongoing basis also requires more work than operating either without a corporation or working through an umbrella company that provides a business infrastructure for you. Taxes and reporting requirements vary, so before deciding to proceed, check what is required to maintain compliance as a legal corporation.

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