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Top Tips to Form a Corporation

thetopbusinessguidesJul 3, 2018, 9:52:35 AM

Starting a business is not as complicated as it seems. In order to form a company, consider the following tips to make the process go smoothly.

Create a Name

Every business must have a unique name. When you eventually come up with yours, make sure it does not include terms such as 'bank', 'insurance', and 'federal'. These are restricted words. If you are registering your business overseas, consult with organizations like Biz Latin Hub Group. They can help you determine certain name restrictions that may exist for companies seeking to set up in South America. Discover more info here.

How to Register a DBA name

Sometimes a business owner operates their company under a different name than its corporate name. To do so, you should register a "doing business as" or DBA name. Each state has specific laws about DBAs, so make sure to check with your local and state business development office for details. Biz Latin Hub Group can clarify the rules for DBAs in Latin America.

Corporate Directors

Appointing directors is a critical part of establishing any corporation. Directors help set corporate policy for the year and make decisions on hiring employees. Some states require that there be a particular number of directors, especially if there is more than one owner.

Draft Bylaws

Corporate bylaws the rules that govern how your company operates. This includes how many company stocks can be issued to how your business decides to keep records. Bylaws do not have to be registered with the state, but it helps if you have an attorney review them.

Write a Shareholders' Agreement

Although shareholders' agreements are not required, they are helpful to have if there is a death, retirement, or sudden departure of an owner, which will necessitate the transfer of ownership of the previous owner's corporate shares. Again, a lawyer may be helpful in drafting this agreement. If doing business in Latin America, the Biz Latin Hub Group can help corporations looking to operate in South America seek legal advice.

Seek Permits and Licenses

Business permits and licenses are a must for operating. The website of the Small Business Administration catalogs what items are required for your company.

Bank Accounts

A corporate bank account must be separate from that of the owner and board of directors. Banks have different requirements for documentation but most require a corporate resolution, though some only need a copy of the articles of incorporation, in order to open a bank account.
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