3 steps when starting a corporation for your business

On Behalf of | Jun 14, 2022 | Business Law

There are numerous benefits to incorporating before you start operating a business. A corporation is a separate legal entity from the people who own and operate the business. You establish a clear delineation regarding property ownership and liability when you create a corporation.

If you start a corporation for your business operations, you won’t have as much personal liability. Creditors will not be able to bring a claim against you directly in most cases over business debts, nor will you be personally liable for issues related to your company’s operations. Your personal property will not be at risk in a lawsuit or if the company fails.

If you believe that the protection of incorporating would be good for you, there are certain steps that you need to take.

Decide on members for the corporation

Every corporation has a board that oversees its operations. Typically, there are multiple members on a corporate board who will all play a role in the company’s large-scale decision-making.

The board members may not be the same people who serve in executive roles for the company. These individuals may have an investment interest in the company or may bring personal experience and connections to the table. Having the right members can set your corporation up for success.

Choose a name and plan a brand

Choosing a corporate name is an important part of the business startup process. You need to verify that there are no other companies with the same name, especially in the same industry. You also want to ensure that you have consistent branding in your marketing from the earliest days that you start your company.

Create a basic business plan

You need to do the research to determine the operating expenses and possible profit margins your business can expect, as well as what insurance and licensing you required to start doing business. Creating a business plan gives you a roadmap to go from a concept and some basic funding to an operational company.

If you focus on the details and try to keep a long-term perspective on your big decisions, you stand a better chance of successfully starting and operating a corporation. Knowing what steps will protect you can help us fully start a new business venture.