How to Set Up a Corporation: An Overview
Setting up your business as a corporation is one of the smartest things you can do for your contractor business. Corporations offer instant professional credibility, better tax write-offs, protection of your assets from litigation, and more. Setting up your business as a corporation is incredibly beneficial, but it isn’t necessarily easy.
At Contractors License Resource Group, we’ve been helping contractors like you build their careers with our programs. Our corporation setup will guide you through the advantageous, albeit complicated, process. Keep reading to learn how to set up a corporation.
Choose a Name
The first step of setting up a corporation is the easiest and most enjoyable; you pick your company name. There are availability lists that are accessible so you don’t waste time picking a name that someone else has already chosen. Doing a Google search is also a good way to determine if a name is being used.
File Articles of Incorporation
Just choosing a name isn’t how to set up a corporation, you need to prepare and file Articles of Incorporation to legally create your corporation within California. These forms include your company name, the purpose of your company, an address, the number of shares you’ll issue, and a small filing fee.
Create Bylaws and Keep Records
Once you’ve filed your Articles of Incorporation you’ll need to prepare a set of bylaws your corporation will operate under. You’ll also need to set up records book where you’ll keep all your most important papers, stock certificates, minutes of meetings, and so on.
Hold Board of Directors Meeting
When you think about how to set up a corporation, this is the moment you think of; a board of directors issuing stock, adopting a seal, and appointing directors. Or it might just be you in your home office. Regardless, have fun with it; you’re now a real incorporated business.
Pay Taxes and File Necessary Paperwork
Finally, you’ll need to comply with and pay required taxes and file all remaining paperwork. You need to file a Statement of Information with the California Secretary of State within 90 days of filing your Articles of Incorporation. You also will need to pay an $800 minimum tax with the Franchise Tax Board.
Consult a Professional
Setting up your business as a corporation can be incredibly complex, but it’s definitely worth it. It will open doors for your business and help you establish a professional and trustworthy image. It can even protect you and your family in the case of litigation. So whether you’re a one man crew or a multi-person team, incorporating your business now is the smart move.
At CLRG we can help form your corporations. Call today to learn how you can incorporate your contractor business.