One of the major reasons business owners choose to incorporate is to protect themselves from liabilities the business may have for debts and other obligations. Because the law considers a corporation an entity, or legal person, it can also sue other people for debts and losses. This designation as an entity also ensures that the life of the corporation is not the same as the life of the individual who starts it. A corporation can last for years after its founding owner is gone. Learn more about how to incorporate by starting the process with registration.
Secretary of State
Each state may have a slightly different process for registering as a corporation within its borders. Typically, there are forms and fees that can make the registration process go as quickly as a few minutes if completed online. Many people hire an attorney or incorporation service to start this process for them.
Articles of Incorporation
Corporations always need a set of bylaws that govern how they will operate. These can give details about how the company is set up, how shares are offered, how often officers should meet annually and how the corporation should dissolve itself if its officers consider closing the business. The bylaws can be a couple of pages and give general information about the company, or they can be very lengthy and detailed, covering every possibility the company may encounter. Once the articles are in place, the Secretary of State will send a certificate to the filing business owner, making its existence in the state official and legal.
In some cases, this does not cover city or county registration requirements, so it is important to know how to register for each of your localities. A city government office or Register of Deeds office will be able to help you with other registrations.
Failure to Incorporate
Although some business owners choose to operate for a while without undergoing the incorporation process, it is not a good idea. Failing to file the necessary paperwork leaves a business owner open for any liabilities the company may incur. This means that any lawsuit or other type of financial obligation will fall completely on the shoulders of the business owner. This is a way to quickly drain any resources the business owner may have. Knowing how to incorporate with a company like Silver Shield Services will help ensure that a business does not have this worry.
The process of incorporating will minimize personal liabilities, protect assets and position a new company to make sound decisions toward being profitable.