Incorporating your company is a great way to secure your personal assets, limit your personal liability and gain tax breaks. When you incorporate your company, it becomes a legal business structure that is separate from the founders of the business. Thus, your business gains perpetual existence and can remain operational and profitable no matter what happens to the original proprietors. However, incorporating your company is a huge decision and can seem overwhelming in the beginning; but with proper planning and research, your company will be on its way to incorporation.
Here are 5 tips to incorporating your company.
1. How Will Your Company Benefit From Incorporation?
Before you begin the incorporation process, you will need to determine how your company will benefit from incorporation. Key questions to ask include; what are your long-term goals? And what type of corporation will you file?
Incorporating your company will give you limitless benefits such as tax benefits and money savings. When your company is incorporated, you will be able to deduct fringe benefits, business travel expenses and social security taxes from the system.
2. Have Several Names In Mind
When incorporating your company, you will need to choose a unique name that is easy to remember and communicate. A great name stands out from the crowd. Make a list of several names and be prepared to go through a corporate name search on the availability of the names you have chosen. Remember to follow the state corporation rules. Some words such as “insurance’’ or “bank” are prohibited unless the company you are incorporating qualifies as such.
3. Hire A Corporate Lawyer
It is always advisable to seek professional advice from a corporate lawyer to help you prepare the documentation. The paperwork required can be quite complicated and a slight mistake can lead to serious financial problems in the future. Work with a qualified company secretary. They will help you in determining the best entity choice for the company. The lawyer should also be unbiased and should have no stake in your company.
4. Appoint A Board Of Directors
When incorporating your company, you will need to select a team of decision makers. A board of directors should be selected by the shareholders. Their names, contact information, and roles should be specified prior to filing the incorporation papers. The board of directors should have the best interest of the company. An odd number of directors is always preferred to avoid deadlock especially when a vote is required.
5. Finalize The Internal Structure
After the official corporation, documents have been filed, and your company has been incorporated, you will be required to make significant distinctions in the internal structure. Separate the shareholders, directors, and officers.
Establish a head office. Your board of directors can meet and implement by-laws. They can also set up the financial structures and appoint officers to head various departments. Always ensure that all agreements are documented to avoid legal entanglements in the event of the death of any shareholder.