If you are starting your own business, you need to be prepared for the challenges that may come your way. For instance, changes in the market can impact your costs and demand. You may find that your staffing needs will also evolve as your business changes, or perhaps you will outgrow your initial office space. Additionally, if you are fortunate to experience considerable growth in your business, you may find yourself considering incorporation. This is a significant step for any organization, and it is one that is not arrived at without a sizable amount of thought. If you have found yourself at such a crossroads, you may wish to learn more about how to form a corporation online.
A corporation is simply a mode of structuring a business. It is, however, unique from, say, a Limited Liability Company (LLC), a Limited Liability Partnership (LLP), or a sole proprietorship. One of the main advantages of forming a corporation is that it can enable you to raise capital with relative ease. As you are able to issue stock, this can give your company a quick cash injection, if needed. This comes in contrast to an LLC, which can face difficulties in raising external investment–investors typically want a stake in the business, which an LLC can make challenging.
How to Form a Corporation Online: Where to Start
If you are looking to form a corporation, you are going to want to address a couple of items at the outset. First, you should determine which state you would like to incorporate your business in. This is an important decision, as some states are more business-friendly than others in that they have more favorable tax rates. Once you have settled on a location, you should then think about what you will name your corporation. Most states have specific requirements about naming conventions–as a general rule of thumb, you cannot have a name that is too similar to other registered corporations.
Drafting Articles of Incorporation
In terms of making your corporation official, you should be prepared to navigate some paperwork. You will need to draft what is called “Articles of Incorporation” and submit them to your state’s Secretary of State office. This document should include information about your business, yourself as the incorporator, your initial directors, as well as the classes and number of shares that you plan to issue. By working with us at Corporation Center, you can prepare your articles of incorporation quickly and efficiently by using our web forms.
Creating Corporate Bylaws and Holding Your First Board Meeting
Corporate bylaws can create a helpful blueprint for how your organization will be run. Though not required by law in most states, they can outline a meeting schedule, record-keeping practices, management duties, and more. Shortly after you incorporate your business, you should also hold your initial board meeting. This can be a good occasion to go over your bylaws or make any changes to your roster of directors.