How to Incorporate a Business

As anyone who has ever owned a business and they will tell you incorporating is a big step in any business process. Lenders, vendors, investors, and other stakeholders are more likely to take your business seriously if you are incorporated. The process of incorporating a business will slightly differ from one state to the other. It will be depended on which state you are doing business in and what type of business you will be building.

What is incorporation

Incorporation entails a process of registering your business as a corporation. Normally, corporations are controlled by three different parties – which are stakeholders, directors, and officers. Shareholders are owners of the corporation and this happens after they purchase stock. They then set up a board of directors who decide on matters of management and policy. The board of directors will be responsible for appointing CEO, CFO, secretaries, and other members who are tasked with the mandate of running the corporation daily.

There are different steps business people can use to incorporate their businesses.

Comply with licensing laws

The first step towards incorporation involves complying with licensing and zoning laws. Most businesses will not need any permits or licenses to operate, especially those in regulated industries such as food and healthcare. You only need to ensure you comply with local laws so that you don’t have to worry about your establishments being denied operating license.

Conduct a business name search

The next step is to ensure you have a unique name for your business. You will not be allowed to use the exact name as another incorporated business in your locality, to ensure there is no confusion to customers. In most cases, the state will host online name search directories to ensure members search for their preferred names.

Draft articles of incorporation

The next step is to draft articles of incorporation. Also known as certificates of incorporation, it includes documents you have to fill with the state to create a corporation. It contains business names, location, number, type of shares as well as addresses of registered agents. It can be a simple two-page document that provides an explanation of the corporation’s purpose, name, and address of the people who will serve on the board of directors, name, and address of the officers for the corporation, and how long the corporation will last.

You will then need to file articles of incorporation with the state. You will be expected to pay a filing fee of about $500 at this stage. Additionally, you can decide to go through the state’s website and follow the filling procedures that will be described there. You can also make use of online incorporation services so that they fill all those details on your behalf. These companies can be very useful in helping you draft the articles of incorporation and filling at a fee.

You will then be required to come up with corporate by-laws, in a document that lays out how your corporation is structured and managed.


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