How To Incorporate
Every business involves risk. There is a risk the business may collapse or stagnate. Control the extent of personal financial liability by making the business a separate legal entity.
Depending on the legal form, the business can be a sole proprietorship, a partnership, a Limited Liability Company (LLC), or a corporation. While sole proprietorships and partnerships are easy to form and maintain, these types of businesses do not protect the owner from personal liability.
The Two Reasons To Incorporate
1 A Corporation is an artificially created entity, formed by a group of people. Its rights and liabilities are separate from the people involved in it. Legally, it can own assets, enter into contracts, be taxed, and sue or be sued.
2 Corporations can last forever, even after the death of the founder.
The Process Of Incorporation
The process of incorporation begins by filing a document with a state official, usually the Secretary of State. This document is called the Article of Incorporation or Certificate of Incorporation. It must include the following information.
1 The proposed name of the corporation, its purpose, and the location of its headquarters.
2 The addresses and names of the incorporators.
3 Details about the amount and types of capital stock that the corporation is authorized to issue.
4 The responsibilities, privileges and rights of each class of stockholder, director, or officer.
5 A set of bylaws, which explain the running of the corporation.
6 Information about when stockholder meetings will be held.
7 All other information relevant to the corporation
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