By registering your firm, you may safeguard your assets from liability concerns as well as expand your lending possibilities. However, this process can be a real challenge for many novice entrepreneurs.
The registration process involves filing constituent incorporated documents with the relevant authorities, which comes with some legal complexities.
To help aspiring businessmen go through this trial, we will tell you what legal documents for corporations you need to submit and what rules to follow. Let’s dive in!
TIP! Before we start there is one little tip we want to share: in order for everything to go smoothly and for you, as a beginner business owner, not to miss anything, we recommend using the services of a business advisor.
It’s like a wedding planner who keeps his finger on the pulse, having everything under control. We also recommend going digital – create legal documents online. Having samples at hand will save a lot of time.
Entity Type Registration
To access the market as a legal entity, your company needs not only a business plan, but a legislative tool, which may be obtained by registering it as a business structure. As a rule, legal forms cover a limited liability company, a partnership, a single proprietorship, and a corporation, to name a few.
They all serve the same objective of improving your company’s legitimacy, but some have legal qualities (or lack thereof) that make them more attractive than others.
Of course, this is dependent on what you are looking for as a business owner – opportunities for expansion and protection, or convenience of registration and upkeep.
Opting for an LLC or a corporation is generally recommended if your business is expected to generate high profits and operates in any high liability risk industries such as law, insurance, or finance, for example.
While corporations provide more financial alternatives, LLCs are typically simpler to set up, operate, and allow for a more hands-on approach to business operations.
Overall Business Registration & Taxes
To register your company in your home state, you must submit a number of corporation legal documents in person or online to the secretary of state or other appropriate government agency. Your business will be regarded as a domestic entity once successful registration has been confirmed.
The typical process for both LLCs and corporations begins with the election of the board of directors, and is followed by the drafting of the articles of association outlining the agreements, roles and responsibilities of each member.
Also, the law requires to have a registered agent who must take part in court proceedings on an LLC’s behalf. This can be any person older than 18, but we advise hiring top-notch business formation providers with a greater level of expertise right away.
Federal registration for LLCs or corporations will also have to get a federal taxpayer identification number.
It is a nine-digit company number that is also known as an Employer Identification Number (EIN). Although sole proprietorships and single-member LLCs with no workers may use the owner’s social security number instead, almost all firms must get an EIN. The IRS website, which provides precise detailed information on the criteria on the EIN application page, allows you to obtain an EIN for free.
Trade Name Registrations
If you create an LLC, corporation, or other type of business entity, the state will register your company name. You cannot start a different company with the same name as someone’s, according to the law.
Additionally, you must file a trademark. The US Patent and Trademark Office is where you may submit a trademark application. Although registering a name might be a good idea to safeguard the exclusive rights that a registered trademark affords, trademarks are not legally essential to operate a business.
Registration of a domain is an extra benefit. Although it is not legally required, having a domain name that is the same as your company name can help you brand your company and reduce the likelihood that it will be mistaken with other online enterprises.
Liability concerns can never be removed, no matter how skillfully you run a corporation or how well you manage corporate documents. Risk is an inevitable aspect of running a business, and it is good to be prepared for it.
Depending on the circumstances, certain insurance plans, such as personal vehicle insurance, may be needed by law as a guarantee.
Many businesses rely on an insurance broker to assist them choose the best “coverages” (and coverage levels) for their scenario, such as the popular ones listed below:
- Liability insurance is recommended as the minimum coverage for any business. It covers practically all obligations, such as damage to firm property or bodily injury resulting from commercial operations.
- Product liability insurance that covers alleged harm from defective products is crucial for businesses that manufacture and distribute products of any kind.
- Professional liability insurance, also known as “error and omission insurance”, covers professional negligence claims by any business employee.
- Commercial property insurance offers additional coverage for land and properties that may be affected by issues such as fire, flood, and vandalism.
- Workers’ compensation insurance protects employees who are injured on the job and is required in all states save Texas for any firm that employs people.
- Auto insurance covers accidents involving company-owned cars and workers who drive during business hours.
Prepare Business Incorporation Documents With Great Deliberation
Depending on the region and business type, registering, naming, business licensing, and insuring a new small business can be a difficult procedure.
The formation documents for corporations can be beneficial since legal issues can quickly mount – from regulatory authorities, other firms, consumers, and even a company’s own workers.
When beginning a small firm, entrepreneurs take on enormous risks, but most of this risk may be minimized by ensuring that all legal requirements are met as soon as possible.
Also, keep in mind that every successful registration is preceded by a lengthy and systematic precedent; examine as many important legal difficulties as possible and overcome them properly.
Some of these issues can be addressed by investigating the numerous collections of resources and information made available by local governments to support growth and prosperity within their borders.