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How to Become Incoporated

Updated on February 9, 2014
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Kate is a researcher and writer who holds a Bachelor of Science (B.S.) degree from Sonoma State University in California.

There are many reasons for a company to become incorporated. It can allow the previous owners of a business to become free of the liabilities associated with owning it. It can also allow a prosperous business to expand and obtain more capital needed for its growth. Whatever the case, the steps for completing an incorporation are pretty much the same whether a business is already quite large or relatively tiny.

First: Choose the Best Kind of Incorporation for Your Business

First, the business owners that want to incorporate should determine the kind of incorporation they want to pursue. There are a few different options. These are incorporating in the state the business currently does business in, incorporating out of state, and incorporating in a foreign nation. However, for most small or medium sized companies, incorporating in the state they do the most business in is probably the wisest idea.

Second: Choose Co-Founders and Sign Preincorporation Agreement

During the next step, each individual that wishes to be a co-founder of the new corporation must meet and accept something known as a preincorporation agreement. This agreement will determine a number of things. It will explicitly detail what people will be on the corporation’s initial board of directors. It will also determine which individuals get to purchase stock in the company, how many shares they will be able to purchase, and for what price they will be sold.

Third: File the Application

Once this has been settled and all the co-founders have agreed to the terms of the agreement, the application for the actual incorporation should be filed. This application should be registered under the name the co-founders wish to use for the corporation.

Forms to complete this application can be obtained from the office of the Secretary of State where the company is being incorporated. After this registration has taken place, the Secretary of State’s office will contact the co-founders and let them know whether or not the corporation’s name is available.

Fourth: Complete Articles of Incorporation

Next, more important paperwork must be completed. This time it will be the articles of corporation for the new business. How to complete these articles of incorporation can differ depending on the state. The office of the Secretary of State should be able to supply the co-founders with instructions on how to properly complete them.

Once this has been finished, the Secretary of State’s office will send the co-founders an official certificate of incorporation. This certificate should include the name of the new company, its location, the purpose of the incorporation, and other information. To be valid, this certificate must also be signed by certain interested parties. This can also vary depending on the state the company is being incorporated in.

Great Informational Video on Becoming Incorporated:

Finally: Schedule First Meeting

Once all of these formalities have been completed correctly, an official charter should be received from the state. Once this happens, a stockholders’ meeting should be scheduled.

At the meeting, certain decisions about how the corporation will be ran must be determined and voted on. This will include the drafting and acceptance of bylaws the new corporation will adhere to. It will also include an election to determine who will sit on the board of directors.

There can be a lot of ground to cover at the meeting. To make sure it runs smoothly, an agenda for the meeting should be drafted and sent out to the stockholders well in advance. This agenda should mention what issues will be voted on as well as who the candidates for the board of directors are.

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