Four Questions to Ask a Legal Professional Regarding Incorporation

June 12, 2015 | Charles Bowen

Question

What are the most important questions I need to ask about incorporating my business?

Answer

Starting a business is challenging. There are several crucial steps that must be performed accurately and completely in order to be legally compliant and protect yourself as a business owner. One of the most important steps is incorporation. Here are four questions to ask a legal professional before starting the process.


Which corporate structure is right for my business?

Due to the tax, legal and liability implications associated with each, knowing which business structure best suits you can be difficult. A corporate attorney can walk you through the advantages and disadvantages of each option and help you make the decision that is best for your particular situation.  There are several options:

  • Sole proprietorship

  • Limited Liability Company (LLC)

  • Cooperative

  • Corporation: C-Corp or S-Corp

  • Partnership: General, Limited Liability (LLP), or Joint Venture


SBALearn more here: U.S. Small Business Administration: Business Structure Articles

 


When it comes to protecting your assets and limiting your exposure to personal liability, incorporating as an LLC, C-Corp or S-Corp is often the best strategy. However, it is vitally important that you run your corporate entity completely independently from your personal accounts.  Learn more here:

That’s a Nice Boat, Keep It: Protecting and Piercing the Corporate Veil

How do I form my corporate structure?

signatureThe process for forming your corporation varies based on type selected. The basics are listed below, but more detailed information can be found by clicking on the links in each section:

  • How to form an LLC

    • Choose a name

    • File Articles of Organization and a Transmittal Form

  • How to form an LLP

    • Choose a business name

    • File a trade name

    • Draft and sign a Partnership Agreement

  • How to form a Corporation

    • Choose a corporate name

    • Appoint a registered agent for service of process

    • Prepare and file Articles of Incorporation

    • Annual registration and appointment of officers

    • Publication of notice of intent to incorporate


In which state should I incorporate my business?

DE_NV_mapFor years, many business owners have been incorporating in states such as Delaware and Nevada for advantages related to taxes and other pro-business laws. Over time, however, many states have now equalized these differences.

Whether you incorporate your business in your home state or another, you must pay filing fees to the state in which incorporation documents are filed, and will be subject to ongoing requirements and fees imposed by that state. Keep in mind that companies incorporated in one state but doing business in another must register to transact business in those state(s). The added costs of fulfilling the ongoing and taxation requirements imposed by the state of incorporation and state(s) of foreign qualification often outweigh the perceived benefits of incorporating outside the home state.


What are the next steps?

Upon incorporation, there are several more steps necessary for properly registering your business with city, state, and federal agencies including:


Once you have all of your paperwork completed and approved by your attorney, you’ll be ready to successfully conduct business. Here are a variety of strategic resources to help you in that endeavor:

Free Guide for Starting a New Business

Topics: Georgia Law for Small Businesses and Startups