what does an incorporation lawyer do

A skilled lawyer, when incorporating a company will consider a business owner’s short-term and long-term goals, and will account for them upon incorporation.

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What is it like to be a corporate lawyer?

An experienced business attorney will be able to inform you of your State’s rules on incorporation, as well as provide you guidance on whether or not incorporation is right for your business. Should incorporation be the right choice for your small business, an experienced business attorney will then be able to prepare the necessary paperwork and ensure the proper …

Can you start a corporation without a lawyer?

Feb 12, 2019 · Much of what lawyers do is focused around helping their clients to identify and avoid risk, and incorporation is no exception. By setting out in writing how a company is governed, who has what rights, and who can make decisions on the company’s behalf, lawyers help stakeholders within a corporation avoid disputes, and more effectively settle disputes when …

What does a corporate lawyer actually do?

He or she serves as your final defense against rejected articles of incorporation. After you have drafted your corporation's articles of incorporation or LLC's articles of organization, your selected incorporator may find instances in which the legal document …

Do I need a corporate lawyer to form a corporation?

May 02, 2022 · Owners who are unclear about the process of incorporation may want to hire an attorney. Peter Home, with the firm Geoff McDonald & Associates, says, "An attorney can guide you through the process as well as teach you the ins and outs of how your company will need to operate once incorporated."

What is the role of an incorporator?

An incorporator is responsible for setting up a corporation. This role is primarily executed before the business is formed, with the incorporator taking key steps to ensure that the corporation is eventually recognized legally. The incorporator must sign the corporation's articles of incorporation before filing with the state in which ...

What is the purpose of articles of incorporation?

The incorporator must sign the corporation's articles of incorporation before filing with the state in which the corporation is registered. The articles of incorporation (known in some states as a " certificate of incorporation " or a "certificate of formation") serves as a charter recognizing the corporation's formation.

How to be an organizer?

Organizers resemble incorporators in many respects. Rather than providing signatures and filing paperwork for corporations, organizers serve limited liability companies (LLCs). Their duties may include: 1 reviewing articles of organization (which generally resemble articles of incorporation) to ensure compliance; 2 signing a certificate of organization or articles of organization; and 3 signing an operating agreement, which dictates how the organization is run. This form often resembles corporate bylaws.

What is the MBCA?

Prepared by the American Bar Association's Committee on Corporate Laws of the Section of Business Law and followed in 24 states, the Model Business Corporation Act (MBCA) shapes standards for American corporate law. In respect to incorporators and organizers, the MBCA sets specific requirements for filing procedures.

What does incorporation mean?

Incorporating also means people will take your company seriously and you can set the stage for future expansion of your business. You can raise capital for the business through the sale of stock. Ownership in a corporation can be transferred easily should you decide to sell.

What are the benefits of a corporation?

There are multiple benefits to organizing your company as a corporation: A corporation limits your personal liability and may make tax breaks available to you. Your corporation can take tax deductions for the cost of health insurance and life insurance.

How to organize a corporation?

There are multiple benefits to organizing your company as a corporation: 1 A corporation limits your personal liability and may make tax breaks available to you. 2 Your corporation can take tax deductions for the cost of health insurance and life insurance. 3 Incorporating also means people will take your company seriously and you can set the stage for future expansion of your business. 4 You can raise capital for the business through the sale of stock. 5 Ownership in a corporation can be transferred easily should you decide to sell.

Incorporation Overview

If you are wondering what is an incorporation, you are inquiring about the process of creating a legal structure for a business. Such legal structures could include the limited liability company (LLC), S corporation, C corporation, non-profit 501 (c) (3), and cooperative.

The Incorporation Process

To have your business incorporated, the following steps must be taken:

The Drawbacks of Incorporating

That said, there may be some drawbacks to incorporating, depending on your business needs. These drawbacks may be more likely if you are a small business owner, and they may include:

What is incorporation law?

Incorporation definition law refers to state and federal laws surrounding the act of incorporating a business. There are some legal requirements for any corporation formed in the country and some that are state specific.

How to incorporate a business?

If a business owner decides that they want to incorporate, they should make sure to complete these tasks: 1 Decide where to incorporate (requirements for incorporation vary from state to state). 2 Meet with an experienced business attorney to make sure to choose the best fit for the company. 3 Decide on the management structure and board of directors. 4 Choose a registered agent for the business. 5 File the articles of incorporation and any other documentation requirements for the state in which the business is incorporating.

What are the rights of a corporation?

Corporations, because they are viewed as their own legal entity, have many of the same rights and responsibilities as an individual, including: 1 Paying taxes 2 Owning property 3 Filing suit 4 Being sued 5 Taking out loans

What are the advantages of corporate structure?

The corporate structure offers several other advantages, including: 1 Ease of ownership and investment transfers 2 Option to sell shares 3 Different stock options 4 Opportunities for growth through local and global stock offerings 5 Highly structured business management

How are corporations formed?

Corporations are formed when a business owner files articles of incorporation with the state in which they plan to conduct business. Most other types of business entities can choose to incorporate once they've already been formed.

What happens if a corporation is sued?

If the corporation is sued, the assets of the owners are not liable in the suit. However, because a corporation can own its own assets and property, creditors and courts can go after anything the business itself owns. Shareholders invest in a corporation creating financial ties, to a point.

Is a corporation a legal entity?

Because a corporation is viewed as a separate legal entity, it is taxed as such. Other entity types, like sole proprietorships and partnerships, are not taxed at the business level, but their owners are taxed on their profits and losses from the company. This is called pass-through taxation.

What is LLC in business?

The limited liability company, or LLC, is best thought of as a hybrid of corporation and partnership. The owners of an LLC pay their business taxes as part of their personal income, while enjoying protections from personal liability. They are more complex than sole proprietorships and partnerships, but afford more protections.

What is a sole proprietorship?

Sole Proprietorships. As the name implies, a sole proprietorship is a company with one owner. There is no paperwork required to establish a sole proprietorship; you simply set up shop. But you still have to acquire all of the necessary licenses and permits.

Do sole proprietorships have liability?

But while they are cheap and simple to set up, sole proprietorships do not offer protections from liability. Profits from this type of legal structure are treated as simple income for tax purposes. Partnerships.

What is a partnership?

Partnerships. When two or more individuals share ownership of a business, including the profits and losses, it is structured as a partnership. Personal liability and management structures are generally based on what kind of partnership is formed: either general, limited, or limited liability.

What is a limited partnership?

Limited Partnership - The personal liability of each limited partner is based (or limited) to the amount of their investment; although at least one of the partners must assume "general partner" status, which comes with greater liability and exposure to debts.

What is the most complex legal structure for a business?

Corporations. The corporation is the most complex legal structure for a business. Corporations offer the best liability protections for owners and stand as their own legal entity. One way to look at it is that a corporation is treated as its own "person" for legal and fiduciary purposes.

What does DBA stand for in business?

Individuals who start sole proprietorships typically use the term "DBA," which stands for "doing business .". For example, the name of a sole proprietorship may be "John Smith, DBA John's Repair Shop.". But while they are cheap and simple to set up, sole proprietorships do not offer protections from liability.

Its About the Initial Decisions

Incorporating a business is not about filing a piece of paper with the Secretary of State (which is what the incorporation services do), it is about making the correct initial decisions. These decisions have substantial ramifications and potentially large costs.

Choice of Entity

So tell me, how do you decide which is the correct entity for you? The choices are a Limited Liability Corporation, C corporation, S Corporation or Partnership? The wrong choice can cost you hundreds to millions of current tax or tax when you sell.

State of Incorporation

And, how do you decide in what State you should incorporate? Another common comment I get is, “my friend told me I should incorporate in Delaware and it saves me lots of taxes.” Guess what, your friend is wrong.

Limited Liability

This is a big, big issue. The primary purpose of using a corporation is to get “limited liability” which means creditors can only get to the assets in the corporation and cannot get to your personal assets like your house or brokerage account.

Other Incorporation Issues

Do you know the tax elections you need to make or other licenses that might be required or how to protect your intellectual property?

Business Prenuptial

If you have a partner or other owners, your shareholders agreement is like a business prenuptial. Would you draft a prenuptial without a lawyer or take one off the internet? Of course not, it requires special knowledge of the law, has innumerable nuances and mistakes are very costly. Remember, it is the “unknown unknown” that will get you.

Mistakes are Costly

If the initial organization is not done correctly and completely, if you choose the wrong form of entity, or if you choose the wrong state, trust me the legal and accounting costs to unravel or correct the errors will be substantial. The tax costs can be very, very significant.

What is an incorporator?

An incorporator is the person in charge of setting up a corporation and registering it with the state. They're responsible for filing the paperwork and signing the articles of incorporation. A business is not fully incorporated and legally registered without an incorporator. Find out more about who can fill this important role during ...

What is the process of forming a corporation?

To form a corporation, business owners must follow a defined process that includes filing legal paperwork called the articles of incorporation. This document may also sometimes be called a certificate of incorporation. It describes:

What is an organizer in a corporation?

An organizer is a person who performs the same functions as an incorporator, except they perform them for a limited liability company (LLC) rather than a corporation. The organizer may: Sign and file the articles of organization (similar to articles of incorporation) or the certificate of organization. Sign the operating agreement.

What is an operating agreement?

An LLC doesn't have by-laws, but it does usually have an operating agreement, which is a document that spells out the rights and responsibilities of the members. The document to be signed depends on the requirements of the state.

What is an organizer?

An organizer is a person who performs the same functions as an incorporator, except they perform them for a limited liability company (LLC) rather than a corporation. The organizer may:

Is incorporation a complicated process?

However, incorporation can be a complicated and costly process, and it is important a business owner understands the general costs of incorporating before beginning the incorporation process. There are typically four types of fees to incorporating: a fee to file the articles of incorporation with the Secretary of State;

Why is it important to form a corporation?

Since a corporation is considered a separate entity, its shareholders and owners are not liable for the corporation's debts. Protection from liability makes corporations attractive to investors, as does a corporation's stock structure.

What are the advantages of forming a corporation?

Since a corporation is considered a separate entity, its shareholders and owners are not liable for the corporation's debts. Protection from liability makes corporations attractive to investors, as does a corporation's stock structure.

Is a corporation a separate entity?

Since a corporation is considered a separate entity, its shareholders and owners are not liable for the corporation's debts. Protection from liability makes corporations attractive to investors, as does a corporation's stock structure. Since a corporation is a separate legal entity, owners of a corporation only pay taxes on corporate profits paid ...

Why are corporations attractive to investors?

Protection from liability makes corporations attractive to investors, as does a corporation's stock structure. Since a corporation is a separate legal entity, owners of a corporation only pay taxes on corporate profits paid to them in the form of salaries, bonuses and dividends.

How much do corporations have to pay for filing?

Corporations are required to pay between $50 and $200 in government filing fees. This is in addition to the filing fees paid to the Secretary of State. Government filings are based on the type of business being incorporated and the state in which the business is incorporating.

How much is franchise tax?

A franchise tax is a fee paid for the privilege of doing business as a corporation in that particular state. This fee usually ranges from $800 to $1,000. Not all states charge this tax, such as Nevada, making it attractive to business owners.

Incorporation Overview

The Incorporation Process

The Benefits of Incorporating

• There are many benefits to incorporation, and these include: 1. Personal liability protection. An incorporated business affords you protection from personal liabilityto your business debts and other obligations. This means you can only lose what you have invested in the company, not personal assets like your car or home. Corporations have an additi...

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The Drawbacks of Incorporating