Is forming a corporation difficult?

As long as you and close associates and family members will own all of the stock, and none of the stock will be sold to the public, the necessary documents-principally your articles of incorporation and corporate bylaws--can usually be prepared in a few hours.

While most states use the term "articles of incorporation" to refer to the basic document creating the corporation, some states use the term "certificate of incorporation," "certificate of formation," or "charter."

The first step is to check with your state's corporate filing office (usually either the secretary of state or department of corporations) and conduct a trademark search to be sure the name you want to use is legally available.

You then fill in the blanks in a pre-printed form (available from most states' corporate filing offices or websites) listing the purpose of your corporation, its principal place of business, and the number and type of shares of stock. You'll file these documents with the appropriate office, along with a registration fee that will usually be between $200 and $1,000, depending on the state.

You'll also need to complete, but not file, corporate bylaws. These will outline a number of important corporate housekeeping details, such as when annual shareholder meetings will be held, who can vote, and how shareholders will be notified if there is need for an additional special meeting.

Fortunately, there are also websites that can make it easier and safe to incorporate your business without the expense of a lawyer, like LegalZoom. If you believe your situation is such that legal assistance would be useful, be sure to speak with an attorney before using a service like LegalZoom.

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