If you plan to incorporate your online business, you are not alone. Most business owners opt to incorporate their companies to protect their personal properties and take advantage of tax benefits. Here, you’ll learn what it means to incorporate a business and if you can do it online.
What it means to incorporate a business
Incorporating a business separates it from the owner and makes it a separate legal entity. This has several benefits, such as personal property protection and tax advantages. However, it also has some cons, such as more documentation and compliance prerequisites.
Incorporating a business involves legally forming a distinct entity separate from its owners. This process creates a corporation or LLC, offering limited liability protection to its owners, shielding their personal assets from business liabilities. Through incorporation, the business gains credibility, potential tax advantages, and the ability to raise capital by selling shares. It establishes a framework for governance, outlining rights, responsibilities, and operational structure within the legal and regulatory framework
Get a professional consultant to help you decide if incorporating your business is a good idea. They will assist you in weighing the benefits and drawbacks to make an informed decision for your business.
Incorporating an online business
Incorporating an online business will need you to:
- Select a legal structure for the company
- Choose a registered agent and apply for the EIN(employer identification number)
- File the documentation with the state you intend to incorporate
Process of incorporating an online business in the US
Pick where to register your business
Selecting the state where you’ll incorporate is the first step in incorporating your online business. You don’t have to incorporate it in the area where the business is situated, but most companies do so since it is easy and cheap to operate and register in their home area.
Consider incorporating it in a region other than your hometown if the laws in that state are favourable to your business.
Once you choose the state to incorporate, you need to register your business with the proper state agency. This will be the secretary of state office in many states, but in other states, it might be the corporation commission or department of commerce.
You’ll be required to submit proper documentation and pay all the charges. You can do this online: you mail the files in person.
Research the corporate name and reservation
Picking a business name is another step in incorporating your online business. If you have potential names, check their availability online via the state body responsible for corporations.
You should reserve the name in your state before you officially register the business. This is a simple procedure you can complete online or via mail. Pick a name that still needs to be put in use and meets all the corporate name prerequisites of the state.
Register your business
Registering your business is a simple procedure that you can complete online. After checking the availability of your name and ensuring no one uses it, here is what to do:
- File articles of organization: after getting a name and a registered agent, file your Articles of Incorporation, also known as Certificate of Organization. You can find the forms on the state website.
- Craft the LLC operating agreement: This outlines the company’s ownership structure.
- Address state, federal and local business prerequisites: you’ll need an EIN and other business licenses depending on what you are selling.
Now you’ve covered the steps you’ll need to incorporate your online business; it’s time to act and enjoy the benefits. However, consult professionals such as accountants, business lawyers and business incorporation online specialists to ensure the process is successful.