Even the largest international behemoths of the corporate world began with just an idea. If you have come up with a concept for a product or service that you no longer wish to keep under wraps, you may want to look strongly at starting your own business. While that initial spark is a necessary catalyst to put you on the road to successful entrepreneurship, it is just one stage on what will be a long journey. A wise initial action to take before starting your business is devising a comprehensive business plan. This can account for overhead costs, and budgetary concerns, and provide a snapshot of what your consumer base may look like. You will also want to think a bit about where you will locate your business. Beyond being in a space that is convenient for your customers, there are also tax considerations to assess, as some states are more business-friendly than others. Assigning your business a legal structure rather early on can also put you in a better position for success. If you are focused on rapid growth, or if you are starting out with a fully-realized concept and a strong team on your side, you may find that submitting incorporation documents online makes a lot of sense for your business.
A corporation is, of course, just one way in which you can choose to structure your organization. Depending on the state in which your business is located, you may have a plethora of options for legal structures available to you. For example, let’s say you are going into business with a friend, colleague, or family member. Any time two or more people venture into business together, that is considered to be a general partnership (GP). Sometimes a GP can be made more formal with a profit-sharing agreement, or, in some states, partners can opt to form limited liability partnerships (LLP). The limited liability company is also a popular mode of structuring a business. As they are relatively easy to create and do not ask for much in the way of maintenance, LLCs can have a certain appeal to new and veteran entrepreneurs alike. With an S- or C-corporation, though, you have certain advantages (and drawbacks) that other structures do not afford. Read on to learn more about what you can expect when you submit incorporation documents online to your local Secretary of State’s office.
Why Should You File Your Incorporation Documents Online?
When the average individual hears the word “corporation,” they likely think of huge, multinational conglomerates like Disney or Amazon. Though it is true that large businesses tend to favor the corporate structure, they are also available to more modest-sized businesses as well. Why, though, would a business choose to form a corporation, instead of, say, an LLC or LLP? Well, in very simple terms, a corporation allows a business to issue fractional shares of ownership to outside investors. This makes it much easier for a corporation to generate capital than an LLC, which makes outside investment somewhat difficult. In exchange for the shares you issue as a corporation, you can get a quick influx of cash, which can be used to hire a larger team or expand to a new location.
The Benefits of Forming a Corporation
So, what exactly is a corporation? Well, on a very plain level, a corporation is a legal entity that is separate from its owners (incorporators). A corporation has many of the same rights as an individual, in that it can own property, hire employees, pay taxes, and borrow money. Some corporate structures also provide their incorporators with limited liability protection. That means that if the corporation is sued or files for bankruptcy, its incorporators can shield their personal assets (homes, 401k accounts, etc.) from any sort of legal judgment. This can go a long way to mitigate some of the risks inherent to starting a business.
Some corporate structures can also receive “flow-through” status from the Internal Revenue Service (IRS). Under this designation, a corporation can pass gains, losses, deductions, and credits to its owners before subjecting them to taxation. Maneuvered correctly, this can really aid your corporation’s bottom line.
File Your Documents Over the Web!
If forming a corporation is right for you, you will first want to select a corporate name that has not already been registered in your state. You will also need to decide who your registered agent will be. The role of this person is to receive all services of the legal process on behalf of your business (this role is often filled by in-house legal counsel). With those pieces in place, you can begin drafting your articles of incorporation. This document should include the name and address of your business, some information about its incorporators, and how many shares you plan to issue.
At Corporation Center, we can help you accomplish this online. Simply select your state from our navigation menu, and you will be brought to a landing page containing our fillable forms. If you have any questions, please feel free to contact us by phone or email.