A company is a legal enterprise established by an individual or a group of individuals to offer products or services solely for making money. Over time, people have been migrating from being an employee to the business world. In other words, individuals, all over the world, want to own and have a company of their own. As a result, the business world has seen a high spike in the number of companies sprouting up. Naturally, this calls for a process and part of this process is incorporating a company. There are many advantages associated with the incorporation of a company. These include raising capital through sales of share, personal asset protection and tax benefits. You have to get acquainted with the process of incorporating a company. The process is virtually the same anywhere in the world. Nevertheless, we will explore the steps involved in involved and some of the salient factors you need to know before you begin the process.
Step-by-step Process of Incorporating a Company
1. Get Familiar with the Regulating Body:
No matter where you are in the world, the first box you need to tick during incorporation is to acquaint yourself with the regulating body. The principal duty of this body is to control and see the registration of companies. These bodies ensure the enforcement of laws guiding the business, monitor and evaluate companies and business. They also set the standard for specific activities and safety of members and companies.
2. Choosing a Name:
The next step in incorporating a company after knowing the business regulating body is to choose a name. Choosing names puts a face to your company. You can produce two or more names of the organization, and then decide which one fits best. In case the chosen name has been picked by another company, you try another one. If the company is a private one, its name ends with Limited, while a public one ends with Public Company.
3. Crafting the Company’s Objectives
Next in line after naming your company is developing the type of business, aims and goals of the company. There must be some inclination behind setting up a business, and that is your aim. Besides, what do you hope to achieve in a few years or long period has to be stated clearly under objectives. Your objectives must embody the techniques and strategy you plan to use to attain the stated goals.
4. Registered Agent
Since incorporation has to do with a legal entity, the company needs an agent or attorney that will represent the company. This registered agent or lawyer will be the one to receive the official documents for your company. However, the agent or attorney should be a registered person in the state or place of incorporation as they will have the authority to act on behalf of the organization.
5. Particulars of the Company
These are the articles or certificate of incorporation. The certificate of incorporation is the document you draft before filing with the state or appropriate regulating bodies for the corporation. The company’s article embodies the name of the company, location, type of product or services, name of the agent and address, and details of the founders.
6. File the Articles
After drafting the necessary document, the next is to file with the state of the incorporation. All you are doing here is submitting the file to the state. There is usually a fee attached at this stage, and the rate depends on your location
7. Draft the Company’s Rules
This is also called corporate bye-laws. It means a set of rules and regulations guiding an organization, as allowed by the business regulating body or higher authority. Establishing bye-laws helps in making planned decisions and development. It also helps in avoiding internal conflict among the staff of an organization and allows them to be consistent. Besides, bye-laws help the company to state its purpose clearly and educate and inform its members. These pieces of information may include the number of shareholders, meetings, voting right and tax details.
8. Create a Corporate Records Book
The corporate record book incorporates all books and records concerning the company’s existence. It is the place where you store necessary data and information that indicates the affairs of your corporation in compliance with the laws of the regulating body. These include the company’s stock ledger, tax information, financial record, copies of articles earlier filed, annual reports and contracts.
9. Conduct a Meeting of Stakeholders
Now that your company is gradually forming a shape, the next thing is to set up your first meeting. So, what do you discuss at this meeting? Simple! You accept the articles drafted, review and accept the bye-laws, discuss the adopted strategy to develop the company and elect appropriate officers like CEO and Managing director. As with every other task you carry out, you must record the minutes of the meeting for future references.
10. Meeting other States Requirement
While it may seem like you’ve come a long way, you are not through with the process. You need to ensure you’ve fulfilled all other requirements of the state or country before opening your company in full. These include getting identification document, opening a business account, payment of first tax and paying off other fees.
Four Services You can Use To Incorporate Your Company
With tonnes of online incorporation companies flying around the internet, it becomes daunting to choose the right one. To avoid this, check below for the top three incorporating services.
1. ZenBusiness
This comes first on the list of incorporating services. It is solely an online company with excellent customers service. ZenBusiness is distinct from other corporations because they make the complicated corporate situation easy. The registration takes a few minutes to complete, and the establishment of your company happens in just a week. Besides, the corporation provides you with a guide to start, and its pricing is quite affordable.
2. Incfile
You pay nothing for the basic service of Incfile, and it contains all the necessary details you need to incorporate your organization. The only fee you fee is the operating agreement fee which goes for $40. There are also more features and plans like the Gold package and platinum package.
3. Northwest Registered Agent
Northwest Registered Agent delivers instant service and good customers service. Aside from filing documents for corporations, Northwest helps you search for names and draft articles in line with your state. You also get online access to formation document annual reporting compliance and state resources. Like other incorporating service providers, they have packages with prices ranging from $125 to $225.
4. Swyft Filings
As their name implies, this is one of the fastest incorporating services available. Despite being a new company, it has managed to make a name for itself. The focus of the company is mainly on highly personified customers service. Like others, it has a basic plan of $49, the standard price of $149 and a premium price of $299. The basic plan has a free domain name, 30 minutes tax consultation, filing and drafting the article and so on. The standard entails the basic plan features, staff identification number and operating agreement. The premium has the features of the standard plan, free 90 days hosting and so on.
Five Factors To Consider When Selecting An Incorporating Service Provider
1. Speed of the Company
Before you choose an incorporating enterprise, you need to consider how fast they file documents. It is vital because incorporating a company needs to be done as quickly as possible. We live in an ever-evolving world that seems not to wait for anybody. So, the more you let the process of incorporating your company drag, the more money you lose.
2. Top-notch Customers Service
Incorporating a company is not a walk in the park. While you can do some of the processes yourself, you need a reliable customer to care to give you listening ears and guide you through the process.
3. Profession Service
It is pertinent to choose a company that knows its onion. The incorporating company you select must always be available to receive any notice from the state. Besides, a professional service will ensure that all your files are up-to-date as and when due.
4. Consider International Companies
With a global incorporating provide, you have the opportunity to operate your business anywhere. Looking for new agents when you arrive at a new place is overwhelming. With an international provider, however, your ability to establish anywhere is guaranteed.
5. Reliable Software
Ensure your choose company has reliable software that can give you access to check their data and monitor notices, entity status, articles and so on.
In summary, incorporating your business is an important step towards the success of your company. It limits your risk in the business in case it fails, widens your visibility and increases your customers’ base. Nevertheless, you should know and follow the due process to enjoy the maximum benefits it offers.