The entire process of launching a new business for profit is certainly complex. There are many considerations such as financial, legal, and practical that have to be taken into account during the launching process. So, it is a good idea to step back from time to time to ensure that you are not missing out on any important things. Knowledge is power when you are launching a new business. When you understand how to take a step at a time with an eye on the success of operations, your organization is going to be in a better position. So, it is significant to think through the incorporation process before legally structuring the business
Is having a corporate structure suitable for your business?
One of the first things you need to take into consideration while structuring your business is which is the best to serve the vision of the organization. There are 4 kinds of business structures available. You need to consider the pros and cons of all of them. Having a corporate structure is useful in case you are interested in giving out shares of your business. But corporations are subject to strict compliance and reporting regulations. The company in this case ultimately is owned by the shareholders. Some of the other alternatives include sole proprietorship and partnerships. You can also opt to structure your company as a limited liability company also known as LLC. This protects you with a personal liability shield.
Decide where you wish to incorporate your business
Decide on the initial state for incorporation carefully. The laws of this state will impact all things such as the corporate tax rate for several of your compliance and reporting baselines. The home state is an obvious choice for the incorporation of most businesses. This is because the businesses are primarily thinking about conducting their business in a single state. So, for instance, if you have decided to incorporate your business in Hong Kong, you will have to understand the process of a Hong Kong company registration first. Incorporating a business in Singapore also requires knowing how to register company in singapore. However, if you are planning to incorporate your business in the U.S. work with an attorney to get permission in all the states where you can register by using the multistate registration process.
Name the decision-makers of your business
The corporate structure is not only rigid, but the ownership requirements for the corporations are also rigid. Unlike partnerships, LLCs, and sole proprietorships, the corporations are owned by their shareholders. Shareholders can also have managerial stakes in a corporation of which they are owners in part. For instance, Mark Zuckerberg is both a shareholder and a corporate officer of Facebook. But, all the shareholders of Facebook are not corporate officers of the company. In the articles of incorporation, you are required to enlist corporate officers and incorporators that will serve different functions. The incorporators of a company prepare, sign and file the articles of incorporation. While the board of directors manages the operations of the business on daily basis.
Registering the business formally
Registering a company formallyis also known as incorporation and it is a complicated process. One of the first things you will be required to do before incorporation is deciding the business name. After you have filed the articles of incorporation, your company name will be registered formally with the government. You will need to work with an attorney for this. You will have to ensure that the name, is not being used by a competitor. You will also need a physical address for the company.
Before you file the articles of incorporation, you need to speak with an attorney about the regulations in the state concerning bylaws. You will have to devise a strategy before deciding on the bylaws that will govern the operations of your business. So, you must not rush this step. It is a good idea to speak with an experienced business lawyer before starting a new business. There are complexities involved in starting a new business that can turn out to be overwhelming. There are many areas where this guidance can be beneficial such as launching finance, formal registration, compliance problems, and contract reviews.