Forming a United States Corporation

A corporation is a legal entity or "person", separate from its officers, directors, shareholders and employees. One advantage of doing business in the corporate form is to prevent the corporation's obligations from becoming the obligations of its officers, directors and shareholders. Each year, we help business owners create hundreds of corporations across the United States. With our large immigration client base, many non-resident clients have asked questions about their ability to form a corporation.

Incorporation

A citizen from a country other than the United States may form a United States corporation. The corporation is formed by filing Articles of Incorporation with the Secretary of State. Each state has slightly different filing requirements, but the main provisions of the Articles of Incorporation are generally uniform. Once your corporation has been registered, the secretary of State will review and approve the Articles of incorporation. You will receive a certificate of incorporation within three weeks.

Corporate Formalities.

Forming a corporation means that the business must follow some corporate formalities. Generally speaking, the corporation must be treated as a separate entity from its owners in order to maintain limited liability status.

The name of your corporation should reflect the industry of your business. Corporate names are protected so the name of your corporation must be unique.

In order to enjoy the benefits of a corporation, such as limited liability, you must let others know that you are operating under the corporate form. For example, you must identify the business as a corporation by including the words "corporation," "incorporation," "company", “inc.”or “co.”

It is essential that the separate existence of the corporation be continually recognized and respected and that any business be done by the corporation acting in its status as a legal person and not by the individuals involved. The corporation should exercise care to hold itself out to the public at all times as a corporation. All letterheads, billheads, advertisements, business cards and telephone listings should use the corporation's full name which indicates its corporate status.

When the name of the officer or any employee is signed to a letter, contract, or check for the corporation, or printed on a business card, you should make certain that the agency capacity of the individuals so signing is clearly indicated. It is not enough that you sign a letter on the corporation's letterhead. You should clearly indicate that it is the corporation's letter which is being signed for the corporation; i.e., agreement should be, CEO, or CFO.

All bank accounts should be established in the corporation's name, and signature cards should be executed by the appropriate corporate officials in their corporate capacities and on behalf of the corporation. Any assets transferred to the corporation become its property and must be treated as such. All actions by the corporation's board of directors or shareholders must be evidenced by resolutions adopted by the board of directors or the shareholders as the case may be. All directors or shareholder's meetings must be held upon the notice as set forth in the by-laws, and any persons entitled to but not receiving such notice must waive notice in writing.

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