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What's the first step for incorporating a small business?
We're about ready to incorporate our small business, but we're not sure where to start. Any ideas?
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3 Answers
I guess it depends really on what you are doing exactly, and what kind of 'other' licenses you would need.
My business is basically online (for the most part). We simply do Web Design/Hosting, fused with some Network Marketing in it.
My first step was just to submit my Articles of Incorporation for my State, then call the IRS and get my tax id's. Business license... and I was ready to go.
Nate:
I offer the following for your consideration.
First, before you move to "incorporate", stop and take time to research and understand the various form of legal business entities. As examples, there are several forms of "incorporation", LLC's LLP's, etc. Each has it's own unique legal, tax and operational requirements. You may find that "incorporating" may not be in your best interest.
You can get all of this information by going to your State's "Doing Business" secction of their website. You can also contact SCORE, an organization of retired business executives that are devoted to providing free business advice and mentoring. They have numerous resources for you. Finally, once you have enough of an understanding of your various options, I suggest you schedule a meeting with your accounting and legal advisors to discuss specific legal, tax, and operational issues as they relate to your business.
No need to spend money when there are numerous free resources out there.
If I can be of any further assistance, please shout.
Chris Haug
First go to your state's Corporations page. Typically, there will be some very simple instructions and even forms to use. Read the instructions. There are also likely to be some guide lines on the site. Again, typically, a small business is best served being a Subchapter S corporation. Make sure that you fit the requirements (e.g. must have fewer than 35 (or 50) shareholders, all shareholders must be natural persons (not other corporations etc.)) The actual incorporation involves the filing of articles of incorporation and a check. Delaware is a good choice if the corporation intends to do business nationally. However, if the small business intends to do business locally, incorporate in your home state. You will generally avoid any "foreign corporation" rules. Otherwise, seeking a good accountant may be more critical early on than a good attorney.
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