Process of Incorporation

by Anna Assad
    Incorporation guidelines are determined by your state.

    Incorporation guidelines are determined by your state.

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    A corporation is a business type that is regarded as a separate legal entity. Other business types such as the sole proprietorship don't have a legal distinction between the owner and the business. To incorporate, the owner must follow the process set out under state laws.

    Name Selection

    A person who wants to form a corporation must first select a name that meets his state's requirements. The corporation typically must have a name that identifies a corporate structure, which is usually achieved by adding a state-approved abbreviation like "Inc." to the end of a desired name. The corporation's name can't be the same as or hard to distinguish from another business already registered in the same state. Once the owner decides on a name, he must check already registered names with the state business department for availability. Procedures vary by area; some states have online name-checking available, while others require a written search request or in-office visit.

    Registered Agent

    A registered agent is a person or a properly registered business in the same state that will take legal notices like civil lawsuit summons on behalf of the corporation. The rules for a registered agent for a corporation vary by state. For example, a Delaware corporation can be its own registered agent as long as it's physically located in the state. Some states accept a registered agent appointment from the incorporation papers, while other states require the agent's signature on a separate document indicating acceptance of the appointment.

    Articles of Incorporation

    The articles of incorporation is the formation document the incorporator files with the state business department. The exact format of the articles vary by state, but some information is commonly needed. The articles must state the name of the corporation, its principal location, and the name and address of its registered agent. A corporation usually must state its purpose, but some states use standard wording that indicates all purposes permitted under state law on all incorporation filings. The number of shares and the price for each share of stock the corporation is authorizing is shown on the articles, and the corporation might have to include an estimate of the number of stock it will issue in the future.

    Considerations

    There may be other requirements the corporation has to meet immediately after incorporating, such as naming a director and officers. The director manages the corporation's daily business for the benefit of its stockholders and can elect or remove officers. Officers include the corporation's secretary, president and treasurer. Some states allow one person to fill multiple officer positions.

    About the Author

    Anna Assad began writing professionally in 1999 and has published several legal articles for various websites. She has an extensive real estate and criminal legal background. She also tutored in English for nearly eight years, attended Buffalo State College for paralegal studies and accounting, and minored in English literature, receiving a Bachelor of Arts.

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