Company incorporation is a must for doing business

If you are thinking of opening a business, you will need to go through the business incorporation process. It is not a difficult process, but each state has its own set of rules and regulations. What you need to know is what incorporating your business will do for you and why it should be done in the first place. Let’s start with what it really means to incorporate your business.

The reason you go through this process is that you are telling the state you reside in that you are opening a business. Most states have forms that you can download and complete yourself. However, if you are going to have partners and stock distributions, you may want to consider legal advice on how to set up your corporation. When you fill out the state form, you are the first to tell them what your business name will be.

Then you’re also recording other relevant information, like where your business will be located. You must also appoint a director; this is someone who claims responsibility for the corporation. It will also include all the officers to be listed in the corporation and you should give each one a title, such as president or secretary. In this declaration you must also establish the way in which your shares will be distributed and what percentage of shares each officer will have.

Another reason why it is imperative to have your company incorporated is that you cannot obtain an EIN (Employer Identification Number) from the federal government without it. Without an EIN you can’t open a bank account, so it’s important that you gather your state documents correctly and mail them in because you can’t go forward without them. You also cannot fill out other required documents, such as filing for state unemployment taxes or a sales tax number.

One of the most valuable things that comes from incorporating your business is that you are differentiating your business assets from your personal assets. What this does for you is protect your personal assets from being part of any lawsuits that may arise from your business. This is especially important with the kind of climate we live in, where everyone’s response to a problem is to sue someone. Be sure to discuss this with your legal advisor when setting up your corporation.

So when you’re considering opening a business, it’s important that you do all of the incorporation paperwork first. If it’s a complex corporation, you should get legal advice, but for simple one-owner corporations, you may be able to do some of the paperwork yourself. Remember that setting up a business is essential to registering with the proper paperwork with the federal government and will help protect your personal assets in the event you are sued.