How Does a Person Become Incorporated?

by Elizabeth Rayne

A corporation is an independent legal entity owned by shareholders, and may be incorporated by an individual. The shareholders are not personally liable for the corporation, which will continue to exist even if the shareholders change or pass away. State law regulates the formation of corporations and varies by state; however, there are some similarities.

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Choice of Venue

In forming a new business, you must decide where you would like to incorporate. While many businesses simply incorporate in the state where the business is physically located, others incorporate in a different state for a variety of reasons including taxation and local court procedure. In order to incorporate in most states, you must have a registered agent who resides in the state and will be responsible for accepting legal documents on behalf of the corporation.

Applicable Law

Each state has unique laws for incorporation, and the steps for incorporating will vary depending on which state you select. Generally, the state assigns oversight to a state agency that acts as a business registrar. In most states, the secretary of state's office approves and monitors corporations. You should contact the business registration office to determine the specific steps for incorporation.

Articles of Incorporation

In most states, a business incorporates by filing articles of incorporation. Generally, this process begins by filling out a form with the corporate name and address, name and address of the registered agent and each incorporator, and the number of shares the corporation will issue. The articles may also include the purpose of the corporation. Generally, the articles must be signed by an incorporator and then submitted to the secretary of state with the appropriate fee. An online legal document preparer can help. After the articles are approved by the state, the business is incorporated.

Standard Requirements

Many states have similar standards for new corporations. Typically, state law requires an incorporated business to select and register a business name that is not already in use. Additionally, corporations usually must have at least one incorporator who signs the incorporating documents, and a registered agent who accepts legal documents on behalf of the business. Many states also require corporations to have a board of directors, composed of at least one member, who oversees the affairs of the corporation. Some states also require the corporation to issue stock certificates to the initial shareholders as part of the registration process.