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Choosing to Incorporate?

Aug 17, 2007
For the novice business owner getting incorporated seems like an endless stream of red tape, forms and complications. How to get incorporated is one question that they simply have too many doubts about and too few answers to be able to make an educated decision. Luckily there are an army of consultants, lawyers, and accountants out there who can help provide the answers to how to get incorporated and most of them for a minimum fee would be happy to assist.

The first question to answer is not how to get incorporated, it is should the business be registered as a corporation in the first place. My belief is yes. Unless you are a really small company, less than $25,000 in annual sales, no employees, working from your home and the products or services you sell have very limited liability exposure, you should be incorporated.

Any good accountant or business lawyer can help a business determine very quickly whether incorporation is the best business model to pursue. Finding a good accountant or business lawyer may be difficult however. In my experience there are several accountants and lawyers that will tell their client not to incorporate, with no real reason or explanation, when in fact they should have been. There are several instances I have worked with business owners running as a sole proprietorship for the last three years. Just looking at the previous year in business if they had been incorporated we could have saved them tens of thousands of dollars in most cases.

Once that initial decision has been reached these same experts can provide all of the answers required as to how to get incorporated. This will include assistance with the filing of articles of incorporation which can be registered with the state in which the business may wish to operate, or in other more business friendly states like Delaware or Nevada who encourage non resident incorporation by individuals outside of the state.

A Corporation has three distinct groups associated with the entity; officers, directors, and shareholders of the corporation. In filing for incorporation most states require the names and addresses of these groups of the corporation, at least the primary officers and majority shareholders..

There are also a number of other requirements that have to be met in order for a business to be incorporated and these include the payment of all applicable fees, taxes and levies of the state in which the business may be incorporated. There are no easy answers to the question of how to incorporate a business but there are great resources out there to help every business navigate their way through the system and make the best possible choice for their business interests.
About the Author
David Gass is President of Business Credit Services, Inc. His company publishes afree weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com
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