Understanding How to Form a Corporation
As a business owner, forming a corporation is often the best way to protect yourself and your business. It provides liability protection, tax benefits, and easier access to funding. But, the process of forming a corporation might look daunting at first glance. A lawyer would prove to be invaluable at this point, as they provide the necessary counsel to ensure that you’re making the right decisions. In this blog, we’ll explore what it takes to legally form a corporation and how a lawyer can help.
Choose the Right Business Entity
The first step is to choose the right business entity, as a corporation may not be the best fit for your business. Determining what entity to file your business as is dependent on your business goals, tax situation, and liability concerns. A lawyer can help you decide which type of business entity is best for you, ranging from sole proprietorships to partnerships, limited liability companies (LLCs) to corporations. A lawyer can also help navigate the tax implications of each business entity, helping you choose the best option for your business. We encourage you to look at our Business Entity Selector Tool to help you with this decision making process.
File the Articles of Incorporation
Once you’ve chosen your business entity, the next step is to file the articles of incorporation. This is a legal document that outlines the basic structure of your corporation, such as its name, address, and purpose. This process is typically conducted with the Secretary of State’s office, and a lawyer can help ensure that your articles of incorporation are filed correctly and legally.
Draft Bylaws
The next step is to draft your corporate bylaws. These are the operating rules for your corporation, outlining how decisions are made and how profits will be distributed. A lawyer can help ensure that these bylaws are clear, enforceable, and legally sound. Having thorough bylaws help prevent future conflicts within your organization.
Obtain Necessary Licenses and Permits
Before you start running your business, you’ll need the necessary licenses and permits. The requirements vary depending on your industry and location, and a lawyer can help you obtain these so that you’re operating legally.
Maintain Corporate Compliance
Finally, after forming a corporation, it’s important to maintain corporate compliance. This includes filing annual reports and complying with state and federal regulation among other responsibilities. A lawyer can help ensure that you’re aware of your obligations, and help you maintain compliance to avoid legal wrongdoing.
Looking to start a corporation? While the process can be difficult, a lawyer helps you understand the relevant legal nuances so that you can make informed, legal decisions. From choosing the right business entity to filing the articles of incorporation, to drafting bylaws and helping with compliance and licenses, a lawyer is your best bet to ensure that your business is formed and operates in accordance with the law. Contact one of our lawyers today to start the process of forming your corporation.
Law 4 Small Business (L4SB). A little law now can save a lot later. A Slingshot company.
