If you are interested in learning more about how to incorporate your business with A People’s Choice, check out this step-by-step breakdown of the process:
Step 1: Determine Your Corporation Type
Before you begin the process of incorporating your business, you must first determine which type of corporation works best for you. For example, you can choose to incorporate as a general corporation, also known as a C corporation, an S corporation, a nonprofit corporation, or a professional corporation.
These business entities differ in several ways, including liability, operations, management, and raising capital. Therefore, it’s important to conduct extensive research to ensure you’re choosing the most advantageous type of corporation for your business. Believe it or not, you may end up determining that another type of business entity altogether better fits your needs!
For more information about the different types of business entities and corporations, check out our guide here.
Step 2: Choose a Business Name
One of the main benefits of incorporating your business is protecting its name. Therefore, in order to incorporate, you must choose a relatively simple and memorable name that represents your business’ goods or services.
That being said, there’s more to the process than simply finding a fitting name! First, you must ensure your desired name follows California’s guidelines. For example, California has specific restrictions in place for business names with the words “bank”, “trustee”, “trust”, “insurer”, and “insurance company”. Plus, the state has statutes in place for the naming convention of every type of incorporation, so be sure to read up on these statutes before choosing your business name.
Finally, you will need to conduct research to ensure your business name is not already in use in California. The California Secretary of State’s website provides more information about searching for existing business names with the Business Search tool. Plus, the site goes into more detail about submitting business name inquiries and reserving your name during the incorporation process.
Step 3: Appoint Directors for Your Corporation
According to California state law, business owners must identify a list of individuals who will make up the company’s board of directors. More specifically, the law states that a C corporation’s board of directors must consist of at least three members. However, be sure to read the legislature for more information.
Generally speaking, the board of directors is responsible for creating and ensuring the company’s actions adhere to a specific mission. Furthermore, the board holds fiduciary responsibility on shareholders’ behalf. In addition to certain legal requirements, the board of directors decides on overall policies and appoints and fires executives.
With these responsibilities in mind, be sure to elect your board of directors carefully. For example, most corporations hire an odd number of directors to avoid voting ties. Plus, it helps to have professionals with relevant expertise on the board; many corporations ask lawyers or accountants to join for helpful advice. Furthermore, board members should NOT have a conflict of interest and should be devoted to raising money and ensuring success for your corporation.
Step 4: File Your Articles of Incorporation
Once you’ve made the necessary arrangements and decisions for a properly-organized corporation, A People’s Choice can help you prepare and file your Articles of Incorporation with the Secretary of State. We will advise you on the appropriate form to use for your specific corporation and help you fill out the form accurately and completely.
Note that the California Secretary of State website advises business owners to consult a professional service or attorney for assistance filling out the Articles of Incorporation. Oftentimes, these forms are returned to the business owner due to incomplete or incorrect information. Luckily, working with A People’s Choice for document preparation assistance can help you avoid paying the $100 filing fee again due to refiling.
Step 5: Create Bylaws
Typically adopted by the board of directors upon the first board meeting, your corporation’s bylaws are an essential part of establishing the general organization and operating rules for your business. A People’s Choice’s full-service incorporation assistance includes bylaws assistance.
Step 6: Hold the First Board of Directors Meeting
The initial board of directors meeting is legally required to incorporate your business. At this meeting, you and other founding business executives will officially “elect” your chosen board members. Then, these individuals will review, revise, vote on, and/or approve the bylaws you wrote in Step 5.
Step 7: Issue Stock
Usually, the board of directors will issue stock certificates to the company’s initial shareholders at the first board meeting. Issuing stock is a formal representation of dividing ownership interest, and is a legal requirement for all corporations. Note that A People’s Choice’s full-service incorporation package includes stock certificates.
Step 8: Obtain Necessary Licenses and Permits
A People’s Choice also assists business owners with obtaining, filing, and submitting the licenses and permits necessary for incorporation. These documents may include, but are not limited to, a business license, employer identification number, and seller’s permit.
Why A People’s Choice?
Working with A People’s Choice instead of an expensive attorney can save you hundreds of dollars! Ultimately, we can help you prepare your California corporation and other business organizational documents for a flat rate. Plus, working with a legal document assistant ensures you will not need to pay to resubmit incomplete or inaccurately filled forms.
Contact us today for more information on how to incorporate your business with A People’s Choice!
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