Guide on Incorporating a Business

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There are always better ways of doing things. You certainly would want the “better way” to incorporate your business. Here are some suggestions on how you could best go through the important decision-making steps you would take to register your business, like choosing a corporate structure, a name and a location.

Here are some steps in incorporating a business and some suggestions on the best way to do them:

Choosing a Corporate Structure

Choosing the right corporate structure for the business is of utmost importance as this would determine how the company would pay taxes and how the owners would assume liabilities. Businesses can be incorporated as C corporations, S corporations or limited liability companies. C corporations are recommended for larger startups as it allows easier transfer of stocks or ownership of the company from one party to another. S corporations are recommended for smaller businesses because the structure allows the owners to “pass through” losses to offset income they receive from other sources. An LLC has the limited liability feature of the corporation, as well as the flexibility of a general partnership. It is gaining popularity as the preferred structure for small businesses. For a detailed comparison of the business structures, visit The Small Business Administration Web site for details.

Deciding Which State to Incorporate

While anybody is free to incorporate in any state, experts usually advise incorporation on a state where the business intends to conduct all or most of its operations. Understandably, it is more convenient and less costly for a business to operate near where its clients and customers are. And registering in another state as a foreign corporation requires paying additional filing fees, complying with new requirements, and preparing more paperwork. While another state may be attractive because of its better tax laws and more business-friendly climate, incorporation in another state is only practical when the business is an international player, or a large publicly held corporation.

To find information related to incorporating a business in your state and other states, visit the USA.gov Web site or Business.gov for more.

Choosing a Corporate Name

When choosing a business name, effort should be made to make sure it does not infringe on another business' distinctive mark. An infringement lawsuit could be costly. The business name should therefore be established after making sure it is available and can be used legally. A search can be made in the Internet, in the state office, directories, and trademark databases like the Trademark Electronic Search System of the U.S. Patent and Trademark Office. Changing it later on is costly too as it would require an amendment to the articles of incorporation, domain names, phone listings, and business documents.

For marketing purposes, a business name must be catchy so that it stand outs. At the same time, however, it should also be free from negative connotations, be easy to understand and spell. This also applies to the domain name of the Web site, which, if possible, should be the same with the corporate name for easy associations.

Hiring of Attorney

The hiring of an attorney to assist a new business in incorporating, issuing of stock, and holding the first shareholder meeting could cost money. But having an expert as guide would make the process easier and faster. When choosing a corporate attorney, choose one who practices near where you are or where your business is located to save on expenses. An attorney who specializes in the industry of the business is even better.

Find help in incorporating a business from lawyers at Attorneys Corporate Service and Legal Fish. You can also incorporate a business online by visit BizFilings or My Corporation.

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