Like HowStuffWorks on Facebook!

How Incorporation Works


Getting Your Corporation Started
As you launch your company, you have to decide what to call it, where you'll set up shop and other factors before you can fill out your incorporation paperwork.
As you launch your company, you have to decide what to call it, where you'll set up shop and other factors before you can fill out your incorporation paperwork.
Digital Vision/Photodisc/Thinkstock

While some future business owners might hire a lawyer to help guide them through the ins and outs of starting a corporation, others will employ the do-it-yourself method. In either instance, the steps needed to get a corporation off the ground don't necessarily require a law degree or a master of business administration (MBA).

The initial step in incorporating might seem like an obvious one -- picking a name. What's the corporation going to be called? Determining a name for a corporation allows it to be identified and sets it apart from other businesses.

Next, you have to select a suitable location for the business. Will it be established in the home state? Will it be set up in a state that benefits the business in some way? Once a name has been decided upon, that name can be researched to ensure that it's not already in use and, if it is available, reserved in the chosen state for exclusive use.

After a name and location have been selected, the bulk of the paperwork can begin. This is the time when the articles of incorporation are created and filed with the state. The articles of incorporation establish the formation of the business and include information such as the name and location of the business, the name and location of the person or entity incorporating the business and the number of shares issued.

With the corporation moving closer to being a fully functioning entity, bylaws need to be created that establish how the business will operate. This is a document for use within the corporation that outlines procedures for how personnel will be selected, how meetings will be conducted, how stock will be handled, how records will be kept and maintained, how the business will be represented and other information that will be necessary for the company's smooth operation.


More to Explore