Requirements for Incorporating a Business Entity
The first step to starting a business involves how to incorporate it into a legal entity. The most common entities that are usually chosen for investment purposes are the LLC and the Corporation. The key requirements needed before answering how to form an LLC or a corporation involves the following:
The rulings for either an LLC or a corporation would be dependent on the state where you are planning to hold your business operations. One of the most important documents being required is the Articles of Incorporation that should be filed in the respective state. The agreement should include all mandated disclosures about your new business.
The Articles usually range from a detailed list of disclosures mostly covering acceptable name of business, number of authorized shares, registered agent, address, business purpose, and the names of shareholders or directors to a less tasking list of disclosures.
The Articles is to be signed by an incorporator that does not necessarily mean the shareholder. A third party in the person of a services provider or even an attorney can be a signatory.
Generally, you don’t want to disclose all facts in your Articles for privacy of the company, but it is advisable to include an indemnity provision to provide further protection to the officers. Additional provisions should also be set in cases where you have more than one class of stock of the corporation to establish the classes of stocks and their rights.
It is also required by all states to appoint one registered agent in the incorporation. This involves an official person or entity located within the state that will be given the right to accept legal documents and related documents in behalf of the business entity.
The last requirement is the payment of a filing flat fee and the submission of the related documents to the proper state corporation agency or what we call as Secretary of State. All these requirements should be met meticulously to avoid application rejections. So, before filing everything, make sure that all the requirements are present and are properly complied with.
The rulings for either an LLC or a corporation would be dependent on the state where you are planning to hold your business operations. One of the most important documents being required is the Articles of Incorporation that should be filed in the respective state. The agreement should include all mandated disclosures about your new business.
The Articles usually range from a detailed list of disclosures mostly covering acceptable name of business, number of authorized shares, registered agent, address, business purpose, and the names of shareholders or directors to a less tasking list of disclosures.
The Articles is to be signed by an incorporator that does not necessarily mean the shareholder. A third party in the person of a services provider or even an attorney can be a signatory.
Generally, you don’t want to disclose all facts in your Articles for privacy of the company, but it is advisable to include an indemnity provision to provide further protection to the officers. Additional provisions should also be set in cases where you have more than one class of stock of the corporation to establish the classes of stocks and their rights.
It is also required by all states to appoint one registered agent in the incorporation. This involves an official person or entity located within the state that will be given the right to accept legal documents and related documents in behalf of the business entity.
The last requirement is the payment of a filing flat fee and the submission of the related documents to the proper state corporation agency or what we call as Secretary of State. All these requirements should be met meticulously to avoid application rejections. So, before filing everything, make sure that all the requirements are present and are properly complied with.
