The following is a guest post by Shimon Sandler. Visit his blog at www.shimonsandler.com.
Incorporating is not just for big business. If you do business of any kind, it is a great way to protect yourself from being sued. A corporation is its own entity. Think of it like a person. You just control it. It can’t make any decisions by itself.
Just remember to follow the necessary procedures when making decisions for the corporation. Because if it walks like a duck, and talks like a duck, and looks like a duck…it’s a duck: the same is true for a corporation. And, you’ll be legally protected. So, don’t co-mingle your personal bank account with the corporation’s bank account. That can leave yourself vulnerable for a claimant to pierce the corporate veil, and attack your personal assets. But, if you keep everything separate, and follow the decision process, then you will be fully protected from any personal lawsuits.
Okay, so how do you do it? I’ll tell you. It’s so easy.
Step 1: Choose a business name
Step 2: Certificate of Incorporation
- Corporate Purpose(s)
- Director Information
- The aggregate number of shares that the corporation is authorized to issue.
- Registered Agent
- Officer Information
Step 3: Apply for a Federal Employer Identification Number (FEIN)
Step 4: Apply for a Certificate of Authority to charge sales tax in your state.
Step 5: Annual Report: Not needed initially.
An annual report must be filed with the State Treasury Department by a date designated by the State Treasurer. This report must indicate:
- The name of the corporation and for foreign corporations, the jurisdiction of incorporation;
- The complete address of the corporation’s registered office and the name of its registered agent at that office in the state;
- The address of the corporation’s main business or headquarters office;
- The names and addresses of the corporation’s directors and officers; and
- The address of its principal office in the state, if any.
Step 6: Open a bank account.
Step 7: Buy a corporate kit. So you can record the minutes of your meetings, and issue shares with a corporate seal.
It’s that simple.
Photo by gilbrit.