If you are really thinking of business incorporation or rather, incorporating your business, you will have know at least, a little idea of what you want to do.
Why do people incorporate their business?
Their are many benefits attached to running a business corporation rather than the sole proprietorship or single-owned businesses outside there.
Am not telling you that running sole proprietorship is not good or lucrative but, there are some extends you can run a business only especially, when you dream of taking the world of entrepreneurship.
Taking the world of entrepreneurship is not just a dream you can achieve alone; take it for instance, Cristiano Ronaldo is a world most famous and successful football, he had dreamt about it and now he is going all well and good.
But, is he the only player playing for Portugal or Real Madrid? NO!
Definitely, he is in team of eleven players, CR7 can’t be successful in football business with his team members. What I want to devise from this illustration is that for a big dream of any successful business, their should be an incorporation.
Many entrepreneurs also though and be convinced that, it will be more than easier and good for them to run their businesses as corporation.
An incorporated business has alot of advantages provided when it is done the right way. Unlike businesses run by sole proprietorship may shutdown if the owners die – yes, I have seen and heard alot of this. As soon as the owner of the company dies, it will either be sold out, auctioned out or taking over by the government or any financial institution (when the owner had used his company as collateral to obtained loan) but, if it’s incorporated business, the company will still stand even if there is strong business’ tsunami.
Also in business corporation (mostly S types), their is low payment of tax.
Am not saying because a company is incorporated, they will be paying few task, NO. I mean, the business owner won’t be burdened with huge tax payments as long as the tax will be taken care of by all the shareholders in the company.
Those are just few among the benefits of Incorporating a business but so sad that many business owners who want to incorporate their business doesn’t know what must be known about their decision. Some have even tried it but failed due to lack of knowledge about business incorporation.
But basically in this article, I will walk you through what you must know, do and avoid when incorporating your business.
Let start the JOURNEY
Business Incorporation: How to Incorporate Your Small Business Successfully
Without wasting your time, below are the steps involved in incorporating a business:-
==>• (1) Be Careful & Determined:-
Why should you be careful and determined before incorporating your business?
Alot of business owners who did not think right before taking into action have regretted their decision, they made a mistake of accessing themselves and their companies well before jumping into it.
Know whether and how your business will be more lucrative after incorporation.
If you are really sure that incorporating your business will be of great advantage for you, don’t hesitate to start.
Be careful about those who might start discouraging you. You have read about few benefits of business incorporation above, don’t you think it’s something worth doing?
If you are really determined, go to the next step below.
==>• (2) Get Your Yourself, Business & Shareholders Together:
For smooth running of an incorporated business, you must be strongly supported by your company’s shareholders, they are like pillars to your business’ future.
They are also the one to elect or oppose any person you wish to give the role of responsibility like the Board of Directors.
They are capable to do and undo but, this does not means you don’t have any authority over your business but whatever you think of doing, dreaming or a strategic business idea, you must inform them before taking any action; remember, their is a law that strengthens their rights as shareholders in your company. But, how can you get yourself, business and the shareholders together? It’s by going for business corporation immediately.
There are two different type of corporation, they are S and C Corporation. It’s obvious that you cannot choose the two together; you must go for the one that fit your business and shareholders.
Which One Should I Choose Between S and C type of Corporation When Incorporating My Business?
As said earlier, you will go for the one that fit you, your business and shareholders. To know the type of corporation to go for, you need to know the difference between the two types of it.
Business Incorporating: What Are the Differences Between S and C type of Corporation?
• In C type of corporation, you can have more than one hundred (100) shareholders while S type of corporation is not sizeable as C. Thus, S can only have number of shareholders fewer than 100.
• Payment of taxes are imposed on all shareholders of C type of corporation but S type of corporation don’t pay tax but rather file an informational federal return.
• Shareholders in C type of corporation bear the responsibility for both gain and loses of the company while in S, the business owner will bear the responsibility for any loss.
==>• (3) Select Your Board of Directors (BOD):-
This is one of the most powerful features of Incorporated Business that you can never see in sole proprietorship one.
The Board of directors of any business are selected by the owner of the company or the Chief Executive Officer (CEO) together with the shareholders of the company.
These directors will have the opportunity to head at least a section, team or work unit of the company.
If you don’t have shareholders yet, you can appoint your BOD alone but don’t think of trying this if you have (shareholders) in you company because the law guiding this act is strict.
These board of directors you are about to choose must be competent enough to handle the job or role given to them.
Note that their details including bio and contact addresses will be in the documents you will submit when you want to register your new incorporated business.
==>• (4) Hire A Lawyer for your Business Incorporation
After getting your Shareholders together by going for corporation and have as well, appoint your Board of directors (BOD), the next thing is to get a Corporate Lawyer.
Corporate lawyers are trained to deal with any issue pertaining to business including business incorporating. Bear in mind that you can’t hire “Just Any Lawyer” but a Corporate Lawyer like that of Mesothelioma or Asbestos Lawyers who they (mesothelioma lawyer who also deal with asbestos or mesothelioma cases.
Go to any reputable law firm and try to hire a professional corporate lawyers: Tell the lawyer you have hired about your decisions and steps you have taken. If the lawyer is experienced enough, he/she knows the next thing to do.
But above all, hire a corporate lawyer who is just ready to deliver his/her legal responsibilities; do not hire the one who is craving for financial materials rather than the usual contract or deal you have both agreed on.
In one of my article, precisely about Mesothelioma Lawyer, I outlined all the steps and what you must do in order to get the best mesothelioma or asbestos lawyer. Compare the article to how you can also get the best corporate lawyer…. READ HERE.
==>• (5) Contact the Government Agency Responsible for Business Incorporation:
Since you have gotten your business together and there is a lawyer to represent you in case of legal molestations, the next thing is to contact your state or country governmental agency responsible for this service.
In some countries like the US, they always goes to their state secretary and the secretary will be the medium between the business owners and the government but if you don’t know your own state secretary, it’s advisable to contact the governmental agencies responsible for this and, acquire any forms related to business incorporation, submit it to where you are directed to submit it to.
==>• (6) Obtain, Fill and Submit All Documents Associated with Business Incorporation
With extension to the point above, you should make sure that you collect all the forms of business association.
You may be directed to other offices or governmental institutions in order to obtain a form, heed to them and collect the form(s).
Among the documents you will be given are:
• Statement of Information Form – This document contains very basic information about the corporation such as the names and address of the directors, members of the board etc.
• Articles of Association
Mind you, you are going to pay some stipulated amount of fee on every single document, so prepare yourself before heading out for the business incorporating forms.
==>• (7) Pay Your Incorporation Fee:
After getting and submitting all required forms, the next thing is to pay for your incorporation fee. This incorporation fee varies from country to country but make sure you get all the details about it from your state secretary or local government areas.
And, unable to pay this fee might not get your business incorporated even, if you have collected and submit tons of forms.
==>• (8) Finally, Register Your Business Corporation With the Government:
After going here and there for the sake of incorporating your business, the next thing is to get it registered with the government.
In united states, you will register your business corporation with Internal Revenue Service (IRS) and some countries like Nigeria also have this government agency but, they are to take care of taxes paid by the country’s citizens.
In country like Nigeria, you will finally Register your business corporation with Corporate Affairs Commission [CAC].
After registering your business corporation, congratulations! You are now running an incorporated business without anybody or governmental agencies disturbance… Go on and start building and expanding your business!
What have you gained? Can you now incorporate your small-business without any difficulties with this guides? Did you have any questions or would like to add or change something from this article? Please, kindly contact me as soon as possible by commenting below.
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