If you are starting a business, you may be considering forming a corporation. Incorporating offers many benefits, but there are some steps to take to properly file the documents that are required. And, yes, it is possible to incorporate without using a business attorney.
Benefits of Incorporation
There are multiple benefits to organizing your company as a corporation:
- A corporation limits your personal liability and may make tax breaks available to you.
- Your corporation can take tax deductions for the cost of health insurance and life insurance.
- Incorporating also means people will take your company seriously and you can set the stage for future expansion of your business.
- You can raise capital for the business through the sale of stock.
- Ownership in a corporation can be transferred easily should you decide to sell.
How to Incorporate
If you are wondering, can you start a corporation without an attorney, the answer is yes. There are two different methods you can use:
- You can follow the steps required for incorporation yourself, filling out documents and filing them yourself with your state, and
- Incorporate Online
Steps to Incorporation
If you are planning to incorporate without an attorney, there is a series of steps you will need to take to set up your corporation:
- First. you need to select a name for your corporation and do a name search with your state's Secretary of State's office to make sure the name has not been taken by another corporation. (You may also want to check state and federal trademark databases.) If the name is available, you may want to place a hold on it, if allowed in your state.
- The next step is to draft your articles of incorporation. This document must be filed with the state Secretary of State's office. The fees for this differ by state.
- Your corporation must select a board of directors.
- Your corporation must designate a registered agent, someone within the state where you incorporate, who can receive legal process and notice on behalf of the corporation.
- You need to create the bylaws for your corporation.
- Next, you can issue stock in your corporation.
- If a business license is required by your state or city, this must be filed. There may be fees involved.
- Obtain an EIN (employer identification number) from the IRS, so you can file taxes for the corporation and hire employees.
Cost of Incorporating
If you file your incorporation papers yourself without any lawyer advice, you will only be responsible for state fees, which total between $100 and $250, depending on the state.
Using an online service costs a couple hundred dollars more, but gives you the peace of mind that all of your documents have been completed and filed correctly, saving you time and worry.
If you hire a business attorney to file your incorporation papers, you can expect to pay a minimum of $150 an hour for their time (plan on at least five hours), in addition to the filing fees in your state.