How Many People Do You Need to Form a Corporation?

In most states, you only need one person to form a corporation. Other state requirements vary, but usually no more than three are required to legally incorporate. An S corporation design is meant for small corporations. The major advantage of filing an S corporation as opposed to a standard C corporation is that you will not be required to file your shares with the Securities & Exchange Commission (SEC).

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What are Corporate By-Laws?

Corporate by-laws are a corporation’s operational blueprint. By-laws outline the structure of an organization. They should be customized for each situation. By-laws set forth the rights and powers of the shareholders, directors, and officers and they determine how those in charge are nominated or elected and they help settle any disputes among parties.

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A Registered Agent and Why You Need One

A corporation and its owner(s) are two separate and independent entities. Because of this legal separation, a majority of state laws require the name of a contact person known as a registered agent. A registered agent is a person who is registered in the state of incorporation to receive important documents from the state or the courts of that state.

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How To Set Up a Corporation

The actual formal process of creating a corporation is known as incorporation. The process involves completing and filing a Certificate of Incorporation or Articles of Incorporation and paying a filing fee. Each state has its own set of laws governing the process of incorporating. Corporate existence starts when the Articles of Incorporation are filed with the state office that handles incorporations (e.g., usually the Secretary of State or Corporation Commissioner), along with the required filing fees. Accelerated incorporations or same day filings are available in some states.

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Can You Set Up a Corporation Without a Lawyer?

While setting up a corporation without the help of an attorney is possible, you may want to take a look at all the variables before deciding to embark on this adventure by yourself. Aside from a corporation being a different legal structure than a partnership, LP or an LLP, there are different legal structures within the corporate form as well.

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The Benefits of Incorporating a Business

There are many benefits of incorporating, ranging from liability protection to tax benefits. The primary reason many businesses incorporate is limited liability. Both corporations and LLCs allow owners to separate and protect their personal assets.

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Where Should You Incorporate Your Business?

While you can incorporate a business in any state you wish, there is no legal requirement that says you have to incorporate in the state in which you live and work; the rule-of-thumb is to incorporate in the state that your company has its principal operations, especially if your business is primarily within one particular state. However, there may be good reasons not to incorporate in your home state.

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How Do You Incorporate a Business Outside of Your Home State?

If you choose to incorporate outside of your home state, you will have to qualify as a foreign corporation in your own home state. For example, suppose you form your corporation in Delaware, Wyoming or Nevada. These are the most popular states for incorporating, but are physically present in another state. This means your business will be a foreign corporation in your home state.

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Where to Incorporate an Internet Based Business

The process of choosing a state to incorporate an Internet business is not substantially different than choosing where to incorporate a brick and mortar business. You must first ask yourself where you will be conducting all or the majority of your business. You should also consider other business issues such as privacy and tax benefits.

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Should You Incorporate Your Business?

If you are starting a new small business, you’re likely considering a series of legal questions, such whether to incorporate the business or operate it as a sole proprietorship or a partnership. If you concluded it makes sense to incorporate, a new round of considerations come into play – whether to form a limited liability company, called an LLC, or a regular business corporation, and if so, what type of corporation?

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