Incorporating a Business into various entities is dependent on the owners and their choice of liability protection. This effect is seen when the company incurs loss, leading to liabilities that are often recovered from the personal assets of the owners. When these entities are small, the individuals involved will prefer the business to become sole proprietor or partnership based. With growth in businesses the owners will decide to incorporate into a C, S, LLC Corporate or Cooperative entity. In any case every entity must be made publicly available under a registered name.
A number of documents are required to incorporate the business into the required entity. The registration of each entity can be done at regional, state or national level depending on the owner choice. When the business grows from private to public organization, it is essential to bring the knowledge about the company to all the owners. While incorporating into public limited company, a number of essentials are required. These essentials known as Articles of incorporation differ in requirement based on entity. The articles are documents submitted for incorporation as a Certificate of incorporation containing all necessary information about the business.
Articles needed for incorporation are Corporate name, Business purpose, Registered agent information, Incorporator information, Number of authorized shares of stock, Share par value, Preferred shares, Director profiles, Officers information and Legal address of functioning business. Every company has to go through with the registered incorporating agents and incorporators to get their business incorporated. Government will not entertain any means of personally incorporating a business. Even when going through online incorporation process, it is essential to have representative of incorporation service provider. It is a requirement to have a physical outlet for the business operations irrespective of the kind of business.
Choosing the type of entity is very important for the business. In the early stages of operation and for small businesses the owners choose the sole proprietor or partnership entity. When it is a family business, many prefer partnership entity among the members involved. For a business operating in multiple states, the business is incorporated in the most feasible state where tax and other benefits are profitable. For businesses operating within a state, ideally has to register in that state. While expanding or changing business from one state to another the owners can choose between the multiple states based on business operations.
Since the documents of incorporated company are public records, it becomes essential to give the correct information and abide by legal laws. Many litigations on companies or organizations will be separately dealt with, based on the type of case. Incorporating a company is not required when there is single owner for the business, which is considered as sole proprietor entity. Though freelancing is considered as business operation, it is not required to go in for incorporation in such cases. Incorporated entity of the business can be changed based on progress of the business. The owners are better to choose the entity type that suits their business and requirement after careful discussion with their legal advisors.