It’s time to get started on your new business! We’re going to explore some expert tips on how to incorporate it and make sure you’re ready from day one.
The first question you might have is: What does incorporating a business even mean?
It simply means making your company a legal entity. As opposed to working as an individual sole proprietor, the incorporation process creates a new legal entity for your company so that it can function separately from its owners. Now that doesn’t mean you won’t be personally liable for any debts your business incurs, you will. But your company’s liabilities will be distinct from your own, and it’ll make it easier to raise money if necessary.
Because incorporating is important, here are some expert tips on how to do it right
There are a lot of issues to consider when incorporating a business, and platform choice are just one of them. The first step is to find the right place to incorporate your business, whether it’s online or through a professional. That way you can be sure that all necessary steps will be taken care of in order to make your company official. There are many platforms that deal with company incorporation and you can visit their website to find out what service they offer. These platforms can get your new company incorporated in a simple and stress-free way.
Your business is your baby, and you want it to grow up healthy. This means getting the name right is essential. You’ll need to make sure your business name is available for registration across all business incorporation platforms, as well as making sure it has a few distinct characteristics:
- Is easily understood by consumers
- Is legally distinctive
- Is not too similar to other company names
- Does not infringe any trademarks or copyrights
- Is not misleading in any way
If you’re struggling to come up with ideas, try searching the internet for similar company names and see what comes up. Chances are you don’t want to use a name that’s already in use so seeing how others have made their choices can help you make yours. Besides a name, you’ll also need to set an address and a bank account.
3. Design Company Structure
A business structure is essentially the way in which your company will be run. This can be as simple as a sole proprietorship or as complex as a limited liability corporation (LLC). The first thing you’ll need to do is decide what kind of arrangement would work for you and your business. A good way to do this is to consider what legal responsibilities and benefits you want your business to have in the future.
Your company will be legally obligated to abide by your state’s business incorporation guidelines. That means you’ll have to decide who has the final say over the major decisions of the business. For smaller companies, this might just mean a takeover by one person, but for larger businesses, you’ll want a more complex system of decision-makers in place. Try thinking of this in terms of a hierarchical structure, with one person on top. For example, you might have one person who’s chief of staff and another who’s a chief executive officer. You will also need a board of directors.
Of course, your business will be an independent legal entity once you incorporate it, but that doesn’t mean you won’t get any benefit from it. This is where the idea of company ownership comes in. Now you can decide who gets what percentage of the business, whether it’s everyone or just one person. You’ll want to make sure that these shares are legally binding and cannot be transferred without permission.
If you need to raise some capital for your new company, you’ll need to have a plan in place. This might be something as simple as trying to get funding from friends and family or it can be more formal, with an initial public offering (IPO). IPO means that you will sell up to 10% of your company to investors so that you can have cash for business expansion. This is a popular choice for many businesses because it doesn’t require you to give up control of your business. Either way, the most important thing is that you identify what your financial needs are and how much money you’re going to raise.
Before you get started on your new business, make sure to consider these 6 expert tips. These simple steps will help ensure that your company is set up correctly from day one and more prepared for any future changes in the market or industry. We hope you found this article helpful and informative.