The process of a business becoming a corporation is called incorporation. Prior to this, an organization is viewed as a single entity. Once the business is incorporated, it’s treated differently in terms of tax consequences and liability factors.
It’s important to contact incorporation lawyers for legal advice regarding this process. Laws vary based on the jurisdiction, the type of corporation and whether you are forming a new business or purchasing an existing business concern.
Types of Corporations
There are different types of corporations that your business may incorporate under. Some of the most common include:
- Business corporation – C Corporation
- Non-profit corporation – 501(c)(3)
- Subchapter S Corporation
- Professional corporation
- Public corporation
A lawyer can help you choose which type of incorporation is best for your business. The factors that are taken into consideration are the purpose of your business, how your income will be taxed and whether you are in business to make a profit.
What is Needed for Incorporation?
While any formal process can sound intimidating at first, let our incorporation lawyers assure you that this is a smooth and straightforward process in most cases. As an incorporated organization, you will have additional credibility and name protection, personal asset protection, tax flexibility and deductible expenses.
Below are the basic steps that are required to incorporate a small business. Keep in mind that each state has different requirements, so there may be slight variations depending on the state you file in.
- Articles of Incorporation: The document must state the purpose of your business, its principal location, the types and number of shares of stock, shareholders, officers of the corporation, and your contact person.
- Corporate Name: Your corporation must have a unique name for your business that includes a legal ending such as Inc., Corp. or Ltd.
- Corporate Bylaws and Shareholder Agreements: These documents outline administrative details such as voting requirements and the date for shareholder meetings.
If you are interested in incorporating your small business, set up a consultation with Susan G. Pinkston, PLLC. We can help you determine the type of corporation that is best for your business and get the filing process completed quickly and efficiently.