Taking the next step by incorporating your business can be about as tedious, tricky, and tiresome as solving a difficult puzzle (not to mention just as unexciting). But if you put in the hard work and long hours, the final result can make all the effort worth the hassle.
Unfortunately, mistakes and errors can delay the progression of forming your own LLC, and increase the duration of time that you are unable to begin making profit—time that you may not have.
To make the process easier, here are ten items you will need to have in order to successfully incorporate your small business.
1. Business Name
The legal name of your business is required to fill out the necessary government documents, such as the Articles of Organization. Make sure there is not already a business with the name of your choice in your state before deciding on a name. (Check your state government’s website.) Your final legal business name must also include a corporate identifier—LLC, inc., corporation, incorporated, etc.—when you fill out the necessary documents.
State laws vary on whether or not an address for your business is required, so review your own state’s regulation on this issue, or ask your incorporator (the agent or company helping you incorporate).
3. List of Directors
You must include a list of people who are involved in forming your business. Their names, addresses, and contact information will all be necessary for your company to be registered by the state.
4. List of Officers
Other officials involved in incorporating your small business may also need to be documented. However, laws on this list vary around the country, so check your own state’s rules.
The person or incorporation company who is responsible for helping you form your business by preparing documents and acting as an adviser must also be included in state registration. You will need their legal name, address, phone number, email, signature, and any other contact information.
6. Business Purpose Statement
The state must have an accurate description of what services or goods your business will sell. Write a purpose statement by asking yourself what your business will offer consumers. This description will need to be either general or specific, depending on your state’s requirements.
7. Registered Agent
A registered or statutory agent is responsible for receiving all letters, packages, and official correspondence related to the business. The agent must have a physical address in the state where your business is to be incorporated.
8. Authorized Shares of Stock
In order to register your business, you will need to authorize a specific amount of shares that can be potentially held by your owners or stake holders, if you should choose to award them in the future. Not all shares have to be authorized, but you are required to set a limit, even if you aren’t offering public stock trading.
9. Par Value of Shares
You must also specify the par value of the shares authorized for reward. Par value can be different than actual value.
10. Preferred Shares
Most small business don’t offer preferred shares, but if you chose to do so you must determine the number of shares available, as well as the voting rights for different levels of ownership. Consult your incorporator if you have questions about shares.
Making certain that you have completed these 10 steps will get you well on your way to completing the arduous puzzle of business incorporation. And if you are feeling weary from the hassles of starting your own business, just keep the final picture in mind.