You have dreams for the growth of your business, and once your business sees some financial success you may wish to take the business public and incorporate. The following are six basic steps you will need to take to incorporate your business.
What does it mean to incorporate your business?
Incorporating a business simply means that your business will become a separate entity for legal purposes. A corporation can own assets and enter contracts. Corporate activities continue on even if you are not involved in them. And importantly, you are usually not liable for the actions or inactions of the corporation.
How to incorporate a business
The U.S. Chamber of Commerce reports that there are six basic steps that you should take if you are considering incorporating your business.
First, your corporation will need a name that is not already taken by another business.
Second, you will need to determine where you will incorporate, as your business will need its own address and needs to comply with state and local regulations.
Third, you will have to choose the type of corporation you will want for your business. Generally, this means deciding between a limited liability company or a traditional corporation such as an S corp or C corp.
Fourth your business will need an employment identification number that allows the Internal Revenue Service to keep track of your business.
Fifth, you will need to set up a bank account for your business. The expenses of your business should be kept separate from your personal expenses.
Finally, you will want to obtain all necessary permits and licenses, and ensure you are in compliance with all state and local regulations.
These are the six basic steps to take if you are interested in incorporation. Keep in mind that state and local regulations on incorporation vary, and there may be additional steps to take in order to complete the incorporation process. Still, it is worth noting what incorporation involves so you can decide if it is right for you and your business.