Did you decide to form a corporation for your company? If you said yes, you might be curious about the answers to common questions about corporations. Here are some of the most popular questions, and answers, about corporations and the entity formation.
What Is a Corporation?
A corporation is a legal formation which provides entrepreneurs with limited liability protection.
Businesses which form a corporation receive a great deal of structure. Corporations must follow strict guidelines for business operations. This includes substantial recordkeeping and allowing the issuance of stock. A corporation may also enter legal contracts, borrow money or take out loans, hire employees and create initial public offerings (IPOs).
What Are Articles Of Incorporation?
A business filing as a corporation must file articles of incorporation. You may file this application with the Secretary of State in the state where you plan to conduct business. Once the Secretary of State receives and processes articles of incorporation, the information becomes part of the corporation’s public record.
What Information Should Be In Articles of Incorporation?
Articles of incorporation covers basic information about the corporation. This includes the following:
- The name of the corporation.
- Physical, and mailing, address of the corporation’s principal office.
- The number of shares the corporation has the authority to issue.
- Name and street address of the registered agent.
- Primary purpose of the corporation.
- Name(s) and street address(es) of the incorporator(s).
- Lastly, the date, print name(s) of the incorporator(s), and signature(s).
What Is the Board of Directors?
The board of directors is a group of people who direct and oversee the business activities of the corporation.
The board of directors of a corporation are typically elected by the shareholders. For a new business, however, the incorporator will designate the initial directors if there are no initial directors named in the certificate of incorporation.
What Are Corporate Bylaws?
Corporate bylaws help a business maintain consistency in the way it operates and communicates organizational rules.
Bylaws are a set of rules. They are agreed upon, adopted, and drafted by the founder or board of directors after forming a corporation. This document specifies the internal management structure of the corporation. It outlines how to elect directors, how to organize meetings, and officer roster and summary of duties. In addition, bylaws specify details about ownership rights, annual meetings, and the addition or removal of officers and directors. Lastly, they may contain information about how the business conducts its affairs and the individual duties of its directors, officers, and employees.
What Are Authorized Shares?
Authorized shares are the number of shares of stock the charter allows the corporation to issues.
Stock is a representation of ownership in your corporation. When your shareholders purchase stock, they are buying a small piece of your business. Similarly, it is common that most corporations will issue paper stock certificates to their shareholders.
What Annual Requirements Do Corporations Have?
Certain requirements must be met to keep a corporation in good standing. Some of these may include the following:
- Filing an annual report yearly with the Secretary of State.
- Filing an annual statement yearly with the Department of State.
- Submit and pay required annual tax returns and pay estimated corporation taxes.
- Hold an annual meeting of the board of directors and take corporate minutes.
- Hold an annual meeting of the shareholders.
In conclusion, form a corporation today. Let the professionals at MyCorporation guide you step by step through the incorporation process. Reach out to us at mycorporation.com to start incorporating your business today.