| Before venturing into corporation establishment, it is a | | | | The first step of corporation establishment is picking a |
| good idea to consider if this is the best form of | | | | name for your business that is accordance with your |
| business structure for you and your partners. | | | | state’s corporation laws. |
| To start with, it is important to know what makes a | | | | • The name cannot be the same as another |
| corporation and what makes it different from other | | | | corporation |
| business structures like sole proprietorships and | | | | • The name must end with a corporate designator |
| partnerships. | | | | like “Corporation”, “Incorporated”, |
| What makes a corporation different from other | | | | “Limited”, or its abbreviated forms (Corp., Inc., |
| business structures is that under the law, it is | | | | and Ltd.) |
| considered as a separate legal entity from those who | | | | • The name should not be associated with the |
| own, control and manage it. | | | | federal government or restricted types of businesses, |
| This means that the corporation can enter contracts, | | | | such as Bank, Cooperative, Federal and National |
| incur debts and pay taxes as a legal entity. | | | | Appointing Directors |
| This is also where the concept of limited liability comes | | | | Most of the time, during the corporation establishment |
| in. | | | | stage, the owners appoint themselves as directors of |
| Limited liability is a trait of corporations where the | | | | the company. |
| business owners are not personally liable for the | | | | However, the directors do not have to be owners of |
| obligations of the corporation, including debts. | | | | the company. |
| In fact, if the corporation is sued, only the assets of the | | | | The directors make the major policies and financial |
| corporation are at risk. The personal assets of the | | | | decisions of the company. |
| owners will not be touched. | | | | Filing Articles of Incorporation |
| This is also the main difference of corporations from | | | | File the Articles of Incorporation and pay a filing fee of |
| other business structures as sole proprietorships and | | | | about $100 - $800, depending on the state. |
| partnerships generally do not give limited liability to its | | | | You will probably have to assign one person, usually a |
| owners and partners. | | | | director, as a registered agent of the corporation. This |
| Another difference is on how each business structure | | | | is so the public knows how to contact the corporation. |
| is taxed. | | | | Licenses and Permits |
| A corporation, as it is a separate entity, must pay its | | | | Anyone who is starting a business, not only as a |
| own corporate income taxes. | | | | corporation, needs to secure necessary licenses and |
| Partnerships, on the other hand, have the profits | | | | permits before starting operations. |
| “pass through” the business to the owners. The | | | | One of the disadvantages of forming a corporation is |
| owners then reports their income or loss on their | | | | the complexity of its establishment. To help you make |
| personal tax returns. | | | | it simpler, you should get help from a knowledgeable |
| Now if you have decided that establishing a | | | | corporate attorney in your state. |
| corporation would be the right move for the business, | | | | To help you deal with issues on corporation |
| then you should be familiar with the steps of | | | | establishment involving its preparation by laws, consult |
| corporation establishment. | | | | with our expert employment attorneys. Visit our |
| Choosing an Available Business Name | | | | website and call us toll free for legal assistance. |