Monday, April 9, 2012
Incorporating a Business and Articles of Incorporation
The most important legal document that your business may ever file is that of your articles of incorporation. This document outlines the way in which your business is to be structured as well as its purpose for operation. It states the guideline of rules in which the company must operate. The articles of incorporation must be drawn up and submitted at the time of incorporation and will state where you plan for your business to go in the future.
Generally speaking, standard articles of incorporation will include the full name of your new corporation as well as the name of its owners, board of directors, and its intended management structure. Along with this will be specific state by-laws and regulations that must be adhered to by the company's officers. Also stated is whether you plan to issue stocks and make the company one that is publicly traded, or if you intend on keeping it privately held. If shares of the corporation are to be sold, this document will list the amount that will be issued. It is also required to list the address for the company's registered office.
Whether you decide to incorporate your business in order to acquire investors or for tax purposes you will need to file articles of incorporation. This document will be used to state specifically in what type of business the company intends to engage. Also included will be your company's plan for reporting profits as well as the accounting period that will be used for paying taxes. Depending on the type of corporation your are forming, you can decide whether to add INC, Corp, or LLC to your businesses name. Part of the incorporation process is that of the articles of association. This mandatory document defines the rules and regulations that governs company's board of directors and its shareholders.
Although it is possible to later make amendments to your articles of incorporation, you will want to file them correctly. Completing them properly the from the start will not only save you money, it will help to avoid any delays in the incorporation process. Due to this fact, it is advisable to seek the assistance of an experienced corporate lawyer. This will insure the corporation's compliance with state laws. Provided that you feel confident in preparing your own documents, there are templates available online and at your local library that will assist you in this process.
There are several benefits of incorporating your business. Once the articles of incorporation are properly filed with the secretary of state, your new corporation effectively becomes a separate legal entity. The business may be eligible for certain tax deferrals or deductions. A shareholders liability is limited to the amount that they have invested in the corporation and they cannot be held accountable for the debts that the corporation has incurred. A corporation also has the ability of continuance beyond a particular ownership. Typically, corporations have a superior ability of raising capital which can lead to the future growth of your company.
Article Source: http://EzineArticles.com/6923964
Posted by Rene at 1:36 PM