Business Incorporation Attorney Alexandria VA
All You Need to Know About Business Incorporation
Business incorporation is the legal process of forming a corporation—a distinct legal entity separate from its owners.
Why do Businesses Incorporate?
Whether incorporation is right for you depends on the specific situation. But let’s focus on the benefit:
- Limitations on Personal Liability—corporate shareholder, are typically not personally liable for corporate debt and lawsuit
- Easy to transfer ownership because incorporation is usually easily transferrable
- Tax Benefits—law considers corporations as a separate taxpaying entity that may be eligible for increased deduction and reduced self-employment taxes.
- Continuity of Existence—corporation doesn’t end with death or incapacity of a shareholder
- Credit Score—corporations build their credit rating and accumulate their credit score using corporate credit.
- Centralized Management—After forming a corporation, the immediate task is the formation of a board of directors to ensures clear management structures
What are the Types of Corporations Available?
There are multiple corporations types which include:
- For-profit corporations
- Non-profit corporation
- Private corporation
- Professional corporation
- S corporation
People associate the term corporations with sizeable multinational companies. However, that’s wrong because small businesses can also incorporate it.
How to Incorporate a Business?
Different states have different specific incorporation laws and procedures. However, there are the musts of business incorporation that cut across all states.
Here is a step-by-step guide of incorporating a business:
- Create Article of Incorporation
Article of incorporation typically establish a corporation’s existence
- Create Corporate Bylaws
Not all state requires a small business to draft corporate bylaws to incorporate. However, it is best practice to document a corporation’s policies and procedures and help with corporate compliance.
- Pay Fee and File Paperwork at Secretary of State
Lastly, you will need to be aware of the fee and other paperwork your state requires for incorporation.
Do you need a Business Incorporation Lawyer?
Whether you’re incorporating a small business from scratch or purchasing an existing one, it is crucial you contact a business lawyer for advice.
Incorporation laws vary from state to state, making it difficult to understand. And it will require you to follow a specific procedure after incorporation to maintain your corporate status.
A skilled business lawyer can help you understand your state’s procedure, incorporate your business, and ensure your business compliance in the years that follows.