| Many businesses can benefit from incorporation. The | | | | process is in your jurisdiction. Generally, you will be |
| main benefit of incorporation for most businesses is | | | | required to complete the paperwork and pay a fee |
| that it shields the business owner from lawsuits and | | | | to become incorporated. Often, either through the |
| protects their assets in the event that the company | | | | Secretary of State's office or a local small business |
| is the target of a lawsuit. Because the company is | | | | group, you can attend a workshop on incorporation, |
| established as a separate entity from the partners, | | | | and perhaps even receive free help with your |
| the assets of the partners are not affected by a | | | | paperwork. |
| judgment against the company. While the risk of a | | | | What Type of Paperwork is Involved? |
| lawsuit may seem remote, it is actually a major | | | | To become incorporated, you must choose and |
| concern for small businesses. | | | | register a name for your business, as well as a |
| Small businesses encounter many challenges; | | | | business address. Next, you will decide what type of |
| however, other options do exist in place of | | | | structure to give your corporation. You can choose |
| self-incorporation. Many self-employed or independent | | | | between a limited liability company, an S-corporation |
| consultant or contractors utilize a portable employer | | | | or a C-corporation. There are benefits and drawbacks |
| of record. Working with this kind of company allows | | | | to each type of corporation, and you should read the |
| workers to remain independent but enjoy the | | | | requirements for each carefully to be sure that your |
| benefits of W-2 employment. Most portable | | | | company qualifies under the structure that you want |
| employers of record offer everything from access to | | | | it placed. |
| group health insurance to coverage with general | | | | One of the most time consuming aspects of |
| liability insurance, and may have tax savings programs | | | | establishing a corporation is drawing up the by-laws. |
| similar to the advantages of being self-incorporated, | | | | While you may have a set of by-laws already |
| such as the ability to get reimbursed pre-tax for | | | | established that set in place the structure of your |
| allowable business expenses. | | | | business, they will probably need to be rewritten. |
| Ultimately, a business owner must do what is best | | | | They must adhere to the standards required by your |
| for his or her company, whether that includes utilizing | | | | state before incorporating, and the information they |
| a portable employer of record or self-incorporating. | | | | must contain is very specific. |
| There are benefits to incorporating a business, | | | | The next step, naming a board of directors, can be |
| including tax advantages and structuring the business | | | | sensitive. It is at this point that many people realize |
| in a way that makes it easier to sell later, when you | | | | the control that they are giving up. If your company |
| are ready to retire or move onto something new. | | | | already has a group of leaders, setting up the board |
| Many small business owners know that it is a good | | | | of directors can be relatively simple. If you are a sole |
| idea to incorporate their business, but are put off by | | | | proprietorship, handing over control of your business |
| the expense. While it is true that you can pay an | | | | to a group of people can be very difficult. If this is a |
| attorney to handle the incorporation process for you, | | | | problem, check your state regulations, you may not |
| you can save a great deal of money by | | | | be required to have a board of directors if you form |
| self-incorporating. While you can complete the | | | | an LLC. |
| process for any type of incorporation yourself, a | | | | After you complete the paperwork, you are ready |
| limited liability company is the least complicated | | | | to pay the incorporation fee and become a |
| corporation to establish. The LLC works well for sole | | | | corporation. If, after you begin the process, you find |
| proprietorships or simple partnerships. You are able to | | | | it too complicated or time consuming, you can always |
| maintain control of your business, without handing it | | | | hire a professional for part or all of the remainder. |
| over to a board of directors, and, in most states you | | | | Hiring someone to write by-laws or research |
| are not required to have bylaws. | | | | prospective board of directors may be worth the |
| Can I Complete the Incorporation Process by Myself? | | | | expense to have the job complete. Since you will be |
| If the expense of hiring a lawyer to complete the | | | | reviewing the work yourself, it will not be necessary |
| incorporation process is been what was stopping you | | | | to hire an attorney to complete these tasks, and the |
| from forming a legal corporation, you should | | | | money saved will be substantial. |
| investigate the necessary steps for self-incorporation. | | | | Note that maintaining your corporation on an ongoing |
| Particularly if you are under no time frame, the | | | | basis also requires more work than operating either |
| incorporation process is straightforward enough that | | | | without a corporation or working through an umbrella |
| you should be able to complete the process on your | | | | company that provides a business infrastructure for |
| own. | | | | you. Taxes and reporting requirements vary, so |
| Each state has its own requirements on establishing a | | | | before deciding to proceed, check what is required |
| corporation, and it is important to visit your state's | | | | to maintain compliance as a legal corporation. |
| Secretary of State website to determine what the | | | | |