Corporation is a business structure that has many benefits, ranging from legal protection to tax breaks. The main benefit is that it separates ownership from management, and allows owners to transfer shares and raise capital more easily. Additionally, shareholders are not personally liable for the company’s debts, so creditors can’t take personal assets like homes and cars to pay business debts. However, the corporate form has its own risks and expenses, including complex paperwork and ongoing regulatory compliance costs.
To incorporate, you’ll need to draft and file articles of incorporation with your state. These serve as your corporation’s official charter and will outline the purpose of your business, number of directors, initial board members, and more. Once you’ve filed, hold a meeting with your initial board to appoint permanent members and discuss important issues related to the corporation’s operation. You should also consider creating bylaws, which establish rules and regulations for how your corporation will operate.
Incorporating a business is an important step to ensure that you’re protected against liability and that your business can grow for the future. There are a variety of different business structures to choose from, but the type of entity you select will depend on your goals and the size of your business. To help you decide, we’ve outlined the pros and cons of each option below.
About the Author
