Getting Started on Corporation Establishment
Ivonne Jade Agustin
There are a number of things that entrepreneurs of a business must keep in mind before they choose corporation as their business structure. Knowing the basics in its formation and operation will help them prevent and foresee problems that may arise in the future.
A corporation is a legal entity that has a separate identity from its owners and members. This allows the corporation to be recognized separately and have assets and transactions under its name.
In the event that one of the members or an owner decides to withdraw from the corporation, then, the operation shouldn’t be affected as its identity does not solely lie on that of the members.
This also means that the corporation may be sued and get sued without necessarily implicating all the members, stockholders and owners in the said lawsuit.
Establishing your Business
Here are things that owners must be reminded of:
• Pick a Name – Finding a name for your business should be one of the first things that must be considered and you must be sure as well to abide by state laws on the proper way of naming the corporation.
• Choosing corporation form - There are three common types of corporation, the “S” Corporation, the general corporation, and the limited liability corporation. Business owners are advised to seek assistance from business lawyers in identifying the type of corporation they would choose.
• Get EIN – After deciding which type of corporation will be used, the owner must get a federal issued Employment Identification Number (EIN) which will be used in different legal transactions.
• Place of Operation – Decide on where the company will be located as this will be the addressed to be used in various applications and transactions.
• Secure Phone Lines – After having a location for the business, owners must now establish phone services in order to have an official contact number for the corporation.
Other important things, such as the bank account and finances of the corporation, should be made clear among owners to avoid misunderstandings and disputes in the future.
Need for a Lawyer
In starting up a business, it is always necessary to look up a business lawyer who can assist and see to it that all contracts and provisions are lawful and that his client will not be blindsided in any agreement that he or she shall enter into.
These lawyers will make sure that all procedures will be lawfully followed and will oversee purchasing of properties and other assets of the corporation.
Business lawyers can assist their clients in other things such as in employment and business disputes that they are involved in.
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