Finishing the Incorporation Process
With the bylaws established, all corporate records will need to be maintained. Like an official scrapbook, the corporate records contain all of the information that is vital to the business, such as copies of the articles of incorporation and the bylaws, along with meeting minutes and stock records.
Corporations must also file for an employer identification number (EIN) with the IRS, a number that identifies the corporation for tax purposes. If a company wishes to establish S corporation status, the incorporator can file with the Internal Revenue Service (IRS) to obtain this status. An S corporation must first be established in the same way that a standard corporation is established before applying to be recognized as an S corporation.
Finally, it's time to fill some seats on the board by selecting directors and officers who will participate in the operation of the company. With all of the personnel in place, the first meeting can be conducted and, with that, the minutes of the board meeting can be recorded. The minutes of this meeting will then be placed in the corporate records book, along with the minutes of all subsequent meetings.
Now that the corporation has been established and is in operation, shares of stock can be issued to the shareholders. The corporation may also be able to issue shares of stock in order to raise capital at this point.
Some of the steps can be carried out in a different order, but some variation of them will need to be done in order to get a corporation up and running. In most cases, the procedures will be outlined by the state in which the business is incorporated. Suppose, for example, you wanted to be the next Colonel Sanders and start a business in Kentucky. Well, the recommended steps for incorporating in the state of Kentucky involve the following:
- Speak to a knowledgeable advisor
- Select a business name
- File articles of incorporation
- Acquire an EIN
- Obtain the necessary licenses for running your business
- Register the corporation with the Kentucky Revenue Cabinet
After you've followed those steps to completion, your corporation will be legally recognized by the state.