Becoming an official business comes with many benefits, but it isn’t something you can simply jump into; there are steps you must take and paperwork you must present. However, it doesn’t need to be too complicated, especially if you get some help along the way. Below is an explanation of the articles of incorporation, the primary document you need to become incorporated.

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What Do You Need to Become Incorporated?

Articles of Incorporation

This is the legal basis of your company and every state requires that you have this prepared at the time you incorporate your company. While it sounds like a big, scary document, it really just outlines the basic information of your business so that it can all be part of the public record. Everything that you need to incorporate your business is essentially part of this document. Below are simple explanations of each item in the articles of incorporation.

Company Name

This one might seem obvious, but once you incorporate your business, you need to make sure there are no conflicts with other businesses that have already been incorporated. If there are, you will need to select another name.

Statement of Purpose

The majority of states require you to clearly outline your purpose. This can be a single sentence that is pretty general in most cases, but your state could require more specific wording regarding the products and services you plan to offer.

Registered Agent

This is the person or company that will receive all official papers and legal documents on behalf of your business. Because this is part of the public record, you do not want this to be your home address.

Incorporator

This is whomever is filing the document with the state. It can be you, an attorney, or pretty much anyone. Oftentimes it is a legal filing service provider.

Number of Authorized Shares

You may not be publically traded, but if your business in incorporated, you must have stock. This is the trickiest part of becoming incorporated as different state rules can determine how many shares you need to have issued at the time you incorporate. You will also need to determine the share per value and determine what is preferred stock and what is common stock at this time.

Directors and Officers

When you file, you need to know who will be making the big policy and financial decisions for the company. These directors will be publically listed and are usually the business owners. You also must select officers before you file. Most states require a president, treasurer, and secretary.

And that is it! If you have these items, you can pull together your articles of incorporation and file with your state.

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August 16, 2016

What Do You Need to Become Incorporated?

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