Forming a corporation is not an easy task; there are plenty of things that you need to keep in mind before doing that. These things are essential to help you get higher growth and results from the corporation. If there are any mistakes at the time of building the corporation, then you will need to face the consequences later. Without a guide, it is very hard to know how to start a corporation properly.
Don’t worry; we did the research and presented some of the most basic steps you need to keep in mind. Here are the steps are given below that you can follow to get better results and growth. Make sure to go through each of the steps to find out more about the corporate structure and build the structure.
How To Start A Corporation – Complete Step-To-Step Guide
Starting a corporation is very exciting and the start of a new journey. First, however, you need to have the roadmap prepared to create a corporation. Most people have the same question about how to structure a corporation. Here are some of the steps given below that you can follow to know more.
1. Select A Name
Although it is a basic step that most people do not give much thought toHowever, the significance of an original business name is very important because it lets you enjoy a positive result for your business. So, first, make sure to add a corporate designation word for your business names such as Limited, Incorporated, Corporation, and others.
Keep in mind to check the list of restricted words from the state’s list. Most commonly, these words are Insurance, Bank, and others. This is one of the crucial steps of how to start a business that you need to complete very carefully. Check the availability of the name that you have selected for your business.
If you want to run the business with another name from the one you have created, you will need to register a DBA (doing business as) name or fictitious name. There are some laws available in every state that you will need to keep in mind based on the state.
2. Appoint The Directors
In the next step, appoint directors for your corporation. Yes, an owner can be the director of a company, but most owners tend to choose other persons as directors. Based on the state laws, you can choose how many directors you want for your corporation. If you are wondering how to start a corporation in California, then try to check from the office of business development to get a better idea.
3. Draft The Articles Of Incorporation
In the next step, you will be required to complete, find, and file different articles of incorporation with the Secretary of State office. Based on the state you are in, the incorporation articles might be called charter or incorporation certificates. Visit the office of state’s Secretary of State to maintain the articles easily. This is one of the necessary steps you need to do very carefully to find out how to start a corporation in Florida.
4. Create The Corporate Bylaws
Bylaws set the rules that will be used to govern the corporation. Mostly, the corporate bylaws will cover all the different things like stocks that the corporation is authorized to issue. Mostly, corporate byways cover different things like which stocks are authorized to be issued by the corporation, meeting procedures, number of required directors, and many others. So, if you are here to find out how to start a corporation in Texas, then this is one of the things that you need to create carefully.
5. Issue The Stocks
As a corporation, you will need to issue stocks when the directors authorize the issuance of the stocks. Therefore, most likely, you will need to be exempt from the SEC requirements and SSRA.
6. Obtain Licences and Business Permits
It is normal to be confused about how to start a community development corporation. One of the steps you need to keep in mind very well is obtaining the licenses and business permits. You will need to obtain them before the corporation is open. Based on the local government and your state, the requirements will vary a lot. The industry where your business is operating is also very important.
From these steps, you might already get an idea about how to start a corporation. However, there are some other steps that you can include as well, such as registering the corporation with State and Local Tax agencies, holding a board of meetings of directors, drafting shareholders’ agreements, opening bank accounts, and others.
Frequently Asked Questions:
Q1. How Much Does It Cost To Start A Corporation?
Suppose you are wondering how much does it cost to start a corporation. In that case, you will need to pay nearly $100-$800 for the formal paperwork that is also known as “articles of incorporation” The amount of the filing fee depends on the state that you are incorporating and the business type.
Q2. Can Anyone Form A Corporation?
Most people don’t tend to go with the idea of being a one-woman or one-man corporation. However, almost all states give you permission to have one owner corporation. In that case, you will need to be the sole director, shareholder, and offer of the company.
Q3. Can An Individual Start A Corporation?
Yes, one person can start a corporation, which is also known to be a single-member LLCs. They are usable for solo consultants and financing the real estate transitions. But it is still recommended to have an executed and written operating agreement for single-member LLCs.
Q4. Who Cannot Form One Person Corporation?
There are many restrictions for one-person corporations that you need to know before you figure out how to form a corporation. For example, financial institutes, banks, financial entities, and others are restricted to be OPCs. Not only them, but the companies listed publicly, insurance companies, government-controlled or owned companies, and others.
Starting a corporation is not as easy as it seems; there are plenty of things that you need to keep in mind. It might seem very complicated to you without a guide. That is where we come in and help you understand it better with this step-by-step guide. Go through the different steps mentioned in this article to have a better understanding. If this article helped you understand how to start a corporation, then share it with others to help them out.