Benefits of a Corporation
Businesses frequently incorporate to limit their owners’ financial responsibility for the corporation’s debts and obligations. A corporation exists separately from its owners, meaning it has its own money and property and can sue and be sued in its own name. For this reason, the owners’ personal assets, including houses and cars, are not at risk if the corporation cannot meet its financial obligations. Other benefits, such as tax savings and appeal to investors, may also be applicable.
Requirements for Incorporating in Missouri
Preparing Your Articles of Incorporation
Your Missouri corporation’s existence begins when you submit your articles of incorporation and the appropriate filing fee with the Secretary of State. The following information must be included in the articles of incorporation:
- Name of the corporation
- Corporate purpose
- Names and addresses of incorporators
- Registered agent and registered office
- Stock structure
- Number of years the corporation will exist, or a statement that its existence will be perpetual
A corporation can offer different types of stock, called classes or series. These classes can offer different rights to their shareholders, for example some classes of stock may offer voting rights while others do not.
Regarding stock structure, the follow applies:
- If the corporation is authorized to issue more than 30,000 shares or if the par value of the authorized shares exceeds $30,000, the articles of incorporation must indicate the number of shares of each class that will have a par value, the par value of each of those shares and the number of shares of each class that will be without par value. Par value is the minimum amount for which a share can be sold.
- The articles must also state the preferences, qualifications, limitations, restrictions and special or relative rights for each class of shares.
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Naming Your Corporation
Before you file articles of incorporation, you should ensure you have chosen a corporate name that is available for use in Missouri. You can do this by searching records on the Secretary of State’s website.
You can reserve a corporation name for 60 days by submitting an application to the Secretary of State. Name reservations are renewable for up to 180 days.
Your corporation’s name must meet the following requirements:
- It must contain the words “corporation,” “incorporated,” “company” or “limited,” or must end with an abbreviation of one of those words.
- A new corporation’s name must be distinguishable from other business entity names in the Secretary of State’s records.
An incorporator signs the articles of incorporation and files them with the Secretary of State. If the articles of incorporation do not name an initial board of directors, the incorporators have the power to appoint directors and approve bylaws. The directors then take over management of the corporation and the incorporators have no further role.
When specifying incorporators, you must meet the following requirements:
- You must name at least one incorporator.
- You must include both the names and stress addresses of each incorporator.
- An incorporator must be a person aged 18 or older.
Directors are responsible for setting long-term strategies and for managing the corporation’s business. Your corporation can have as many directors as you choose, as long as there is at least one. The articles of incorporation or bylaws should specify the number of directors and can also specify eligibility requirements for directors.
Specifying a Registered Agent and Registered Office
A registered agent is a person that receives legal notices and other documents on behalf of the corporation. In Missouri, a registered office must be the registered agent’s business office.
The following additional requirements apply when naming a registered agent and registered office for your business:
- The articles of incorporation must list the street address of the registered office and the name of the registered agent at that office.
- A registered agent may be a person who resides in Missouri or a corporation authorized to conduct business in Missouri. The registered office must be the same as the registered agent’s business office, and it must be in Missouri.
Stating a Corporate Purpose
The articles of incorporation must include your corporate purpose, but you can satisfy this requirement with a general statement such as the following: “The corporation is formed to conduct and transact all lawful business activities allowed under the laws of the State of Missouri.” Most corporations use this sort of general language to allow flexibility in case the nature of the business changes in the future.
Determining Incorporation Bylaws
A corporation’s bylaws provide the corporation with a set of operating rules and usually specify such matters as the number of officers and directors, their terms in office and the way shareholder meetings are conducted and votes are taken.
Bylaws can contain any provision for managing and regulating the corporation’s affairs. Missouri law does not require any specific items to be included in the bylaws.
Bylaws are not required for incorporation, but the directors or incorporators may adopt initial bylaws. Bylaws cannot be inconsistent with the law or the articles of incorporation.
Costs of Incorporating in Missouri
The Missouri Secretary of State requires a fee when filing articles of incorporation or reserving a corporation name. The fee for filing the articles is based upon the value of authorized shares. Corporations are also required to pay state and federal income taxes.