Incorporating Your Business
Corporations have a number of benefits that make forming one an attractive proposition. For one, publicly traded companies are able to raise capital quickly by selling shares of stock. Secondly, corporations have favorable tax laws, and S corporations don't pay taxes at all. Third, corporations have limited liability, which means that investors are only responsible for the amount of their investment, and not any additional debts which the business incurs. Additionally, corporations have a separate legal identity, which protects shareholders and executives and allows the corporation to sue or be sued as though it were a person.
Incorporation isn't right for every company, but it may be right for yours. If you're interested in forming a corporation, there are a few steps you'll have to follow:
- You'll have to decide where you want your company to be incorporated. Most smaller companies should file for incorporation in the state in which they do the majority of their business, while larger corporations tend to file in states with the most lenient corporate laws.
- After you've determined where you want to file, you'll need to sign a pre-incorporation agreement with any other owners of the company. This document will spell out important aspects of the company, such as if it will be publicly traded or closely held, how many shares will be issued, and who will have them (in the case of closely held corporations)
- File for incorporation with the office of the Secretary of State. You'll need to submit a name under which you will incorporate, which must be unique. The office will let you know if there are any problems with your name.
- Sign the Articles of Incorporation, which will be make official the organization and rules of your corporation.
Contact Us
If you are interested in learning more about forming a corporation, or if you would like legal assistance in incorporating your business, contact the Austin business lawyers of Slater, Kennon & Pugh Ltd.LLP by calling 512-472-2431.