Business incorporation can encompass many definitions. In the US, for example, if a person wished to incorporate their home business, a sole proprietorship or S corporation would need to be filed with the State. Conversely, if you decide to incorporate a business in London, it would be known as Company Registration in which specific documents would have to be registered with Company House.
On the other hand, there are several types of companies in the UK such as: PLC or Public Limited Company; LLP or Limited Liability Partnership; LP or Limited Partnership; and CIC or Community Interest Company. Moreover, besides incorporation in the US, there is also LLC or Limited Liability Company which is similar in scope to its counterpart LLP.
What are the advantages of business incorporation? First, the profits of the corporation are not subject to taxes; either Medicare or social security. Second, for larger corporations there is less hesitancy to approve credit. Third, there are many benefits a corporation can offer to its employees.
For those who seek business incorporation utilizing a Limited Liability Company, one of the key components is that any losses can be deducted and there is a greater flexibility due to the fact that the business mirrors a sole proprietorship.
Regardless of whether the act of business incorporation is conducted in the US or abroad, there are some factors which come into play before you decide to incorporate. First, it has to be determined whether or not you will file under sole proprietorship, especially if you have a home business with no employees. Second, registration forms have to be filed with the State. You can obtain these forms through your state government website.
Third, what will your company known as? A good idea is to come up with a unique name. Once you send this information to your State office, they will advise if the name is accepted. Fourth, if you have a small to medium-sized business, you may wish to file the Articles of Incorporation with the State office. The forms can be obtained from them as well.
For larger businesses who wish to incorporate, there are many more steps that need to be taken including: the election of board members at the first meeting; a formal election of said board members, and the bylaws must be adopted as well.
Although business incorporation may require a great deal of research and thoughtful consideration regarding the business and its eventual goals, the very first step before incorporation begins is acquiring a Federal EIN number from the state in which you operate the business. The EIN number replaces your social security number in all facets of your start-up business. For more information in your state or country, check the government sites online to ascertain what is required before you begin the process of business incorporation.
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