Commonly Asked Questions Regarding Articles of Incorporation

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Do You Need a Lawyer to Become Incorporated?

No. There are incorporation kits available that enable you to file and incorporate without the aid of a lawyer. There are software programs and Internet sites for incorporation. The advantage here is that incorporating yourself can save you hundreds of dollars. The disadvantage is that missing an important detail could cost you money and aggravation later on. We recommend that you do take the time to find a reputable corporate lawyer who can guide and advise you as your business grows.

What Are the Articles of Incorporation?

The Articles of Incorporation provide the information that is required by your state to do business. In general, this information includes the proposed name of the corporation, purpose of the corporation, names and addresses of the shareholders, and location of the corporation.

What Are the Corporate Bylaws?

Corporate bylaws are created by the corporation and describe how the corporation will run. The bylaws make clear what the responsibilities of the shareholders, corporate officers, and board of directors will be. Bylaws are for the corporation's use and do not have to be filed with the state.

What Is a Shareholder?

Shareholders have a financial stake in the corporation. They paid for stock the corporation uses for capital to run the business. Shareholders elect the board of directors for your corporation. Typically, when starting out new and small, the shareholders are those individuals who have created the business.

What Is the Board of Directors?

The board of directors is elected by the shareholders to set company policy, decide how the business will be run, and appoint the chief executive officers. What if you are in business by yourself? If you are alone then you are the only shareholder of the company. Therefore, as a shareholder you could appoint yourself as president, vice president, and treasurer. The only exception would be if your state requires that different people hold those positions .

What Are Shares of Stocks?

Shares of stocks represent a percentage of ownership in a corporation.

Are There Yearly Responsibilities I Should Be Aware of?

First, make sure you file your tax return on time each year. Second, renew and pay your corporation fee when your state sends the renewal form. Miss this deadline and you will pay a stiff late fee. In addition, if you miss the renewal deadline within your state you will be considered unincorporated. Are you starting to see the domino effect developing? If you are now unincorporated you will have file for reinstatement and that costs time and money. If these details are not corrected by tax season you run the risk of running into trouble with the IRS. For example, you cannot file taxes as an S-Corporation (or anything else) if your articles of incorporation are null and void.

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