| Before starting the process of incorporating your | | | | - Stock Ledger |
| business, you need to decide whether incorporation is | | | | - Stock Certificates |
| right for you and your business. | | | | With the introduction of the latest Corporation Act, the |
| The main benefit of becoming incorporated is the | | | | incorporation process has become less complex, and |
| limited liability status that incorporation affords the | | | | as such there are now many companies on the |
| company's owners. Personal liability of the owners is | | | | internet who will assist you to incorporate, and with |
| restricted to their capital invested. | | | | simple incorporations being performed online. It is |
| The primary disadvantages of incorporation are double | | | | always advisable to seek professional legal and |
| taxation and the additional burden of statutory controls | | | | taxation advice though in advance of incorporation. |
| and record keeping. Double taxation relates to the | | | | Once the certificate of incorporation and associated |
| taxation of the corporation's profits and the taxation of | | | | documents are filed with the secretary of state in your |
| the dividends from the net profits. It may be possible to | | | | chosen state of incorporation your corporation |
| avoid the double taxation through filing to the IRS to | | | | becomes official. |
| become an S-Corporation (professional taxation | | | | Stock certificates should be issued to shareholders in |
| advice should be sought on these matters). | | | | compliance with securities laws and all corporate |
| Once it is decided that becoming incorporated is the | | | | actions and meetings minutes should be recorded in |
| right course of action for your business you need to | | | | your official Corporate Minute Book. |
| decide on a company name and in which state to | | | | You will also need to elect and record officers and |
| incorporate. | | | | directors of the corporation, the number of directors |
| Name availability can be checked with the secretary | | | | will depend on your local state law. |
| of state for your chosen state of incorporation. At the | | | | You will also need to contact the IRS and obtain your |
| same time you should also do a trademark check, this | | | | state and federal tax ID numbers, the federal forms |
| can be done at the US trademark website. | | | | you need can be obtained from the IRS website. |
| If you business is small and only likely to trade in your | | | | You should also decide whether or not filing for |
| own state of residence then your own state is likely to | | | | S-Corporation status with the IRS is appropriate for |
| be the one most suitable for incorporating in for your | | | | your business, as a small company the benefits of |
| business. If you are likely to trade across states, and | | | | avoiding double taxation may be worthwhile. |
| you are confident of significant growth, then a state | | | | After becoming incorporated your will need to open a |
| such as Delaware or Nevada may be appropriate as | | | | corporate bank account and ensure you have |
| they offer favourable trading conditions, although your | | | | appropriate accounting systems and records in place |
| set up costs and ongoing costs will be higher. | | | | to meet statutory requirements. |
| Once you have your name chosen and a state of | | | | If your newly formed corporation is a new business |
| incorporation decided on you are ready to prepare | | | | you should check with the local authorities to see if |
| your incorporation documents. The documents will | | | | there any special licences required for your type of |
| include: | | | | business to trade. |
| - Certificate of Incorporation / Articles of Incorporation | | | | If you have to hire staff, you should have formal |
| - Bylaws for your Company | | | | contracts of employment in place stating the terms |
| - Resolutions of the Board of Directors | | | | and conditions of employment, and where necessary |
| - Stockholder Resolutions | | | | have confidentiality agreements in place. |