01
Jun
11

Should I Incorporate?

Even if you are a one man or one woman business—yes, you should incorporate! No matter what kind of business you are in, setting up a corporation protects your personal assets. This is not as daunting as it sounds but you should have an attorney assist you in the process. You may miss many money-saving steps if you simply use a kit you purchase in an office supply store.

Here’s a breakdown of the process:

  1. Decide where you will file your articles of incorporation. Usually, this is the state where you conduct your business.
  2. Contact the Secretary of State’s Office for the paperwork needed. Make sure no one else is using your company name and claim your name.
  3. Decide if you want to be a private or public company that allows others to purchase stock. If you are a public company, you will need to have a board of directors/trustees and you need to set a price for your stock. Most small to medium sized businesses are private.
  4. Write your articles of incorporation. If these are not written by an attorney, ask an attorney to go over them to make sure they are legally sound.
  5. Set up dates for annual meetings. Even private companies need to have an annual meeting, even if it’s done while the proprietor is having coffee at the breakfast table.
  6. File the documents and pay the necessary fees with the Secretary of State.

If you don’t set up your corporation correctly, this could result in a huge monetary loss if you are sued. Plaintiffs know that many corporations are a shield. They may be able to get through that shield if they can prove you didn’t follow all the proper steps when incorporating.

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