Incorporation - how to get started

It all begins with filing Articles of Incorporation with the Secretary of State or other regulatory agency.

Forming a corporation is a relatively simple process. It begins with filing the Articles. You will need to assemble the following information:

1. Name of the company: This name must be different from the name of any other business entity filed in Nevada. It must include an indication that it is a corporation, such as "Inc., Incorporated, or Co." There are some words that can't be used without prior approval by a governmental regulatory body, such as "accountant," "bank," "trust," "insurance,"or "engineer." To check on name availability for a new corporation in Nevada click here.
2. The name and street address of the resident agent. In most states every business entity which is registered with the Secretary of State must appoint a resident agent or registered agent. The resident agent is the person or entity located in the local state which is appointed by the business entity to accept service of process if the company is sued in that state. Also, the resident agent is the official liaison between the company and the Secretary of State. The resident agent must sign the Articles of Incorporation signifying that he accepts the responsibility to act as resident agent.

   If you would like information about the resident agent or legal services provided by our law firm, please click here for a no-charge 1/2 hour consultation with Dave Guinan.

3. Information about the authorized capitalization of the company must be furnished. You must specify the number of authorized shares of stock with par value and the amount of the par value. Alternatively, or additionally, you must specify the number of authorized shares of stock without par value. This information is used in part to determine the amount of filing fees for the articles of incorporation – the more authorized capital, the higher the filing fees. We generally provide for capitalization of $25,000, which is the maximum authorized capital for the minimum filing fees.
4. The name and addresses of the Initial Board of Directors. This information will become part of the public record.
5. State the intended purpose of the company. This information is now optional. When it was mandatory, we used to state a purpose such as “operating a retail store,” and then conclude with the catchall language: “and any other lawful activity.”
6. The name, address, and signature of the organizer.

The corporation commences its legal existence on the date the Secretary of State files in the Articles of Incorporation. You shouldn't sign any contracts on behalf of the company or attempt to open a bank account for the company until the Articles are filed.

Bylaws should be prepared as a part of the Incorporation

The Bylaws should contain all of the important rules and guidelines for the operation of the company. They contain such things as the number of directors and how they are elected, the time and notice requirements for meetings, quorums, the officers and their duties, rules relating to the issuance of stock, rules relating to the amendment of the bylaws, and just about anything else that the stockholders feel is necessary or desirable for the operation of the company.

The initial Shareholders should hold an organizational meeting right away. At that meeting they should elect the initial Board of Directors, adopt bylaws, decide whether they want to be a C corporation or an S corporation for tax purposes, appoint the initial officers, authorize the establishment of a bank account, and adopt any other resolutions they feel is necessary to get the business started.

Unlike the Articles of Incorporation, there is no standard printed form for bylaws. The bylaws should be prepared and reviewed for the specific needs of the company by an attorney. A well drafted set of bylaws can be tremendously helpful for giving guidance about the operating procedure for the company or in the event of a future dispute between the shareholders.

Additional steps in the incorporation process.

There are 3 more matters you have to handle within a short time after you incorporate.

1. You have to file an initial list of officers within about 30 days. This information becomes a public record, so whatever names or addresses you list become available to public scrutiny on the internet (for example, attorneys doing asset searches, vendors, and otherwise snoopy people. Importantly, Nevada does not require corporations to disclose the identity of their shareholders. As you might expect, there's a filing fee of $125.

   You'll have to file a similar list once a year before the anniversary date of the filing of your Articles. You guessed it - there's a filing fee of $125.

   If you don't file the initial list or the annual list before the due date, the Secretary of State will declare your corporation in default. If the failure continues for a year, the Secretary of State revokes the charter.

   For some reason, many small business entities seem to have difficulty getting their lists filed on time. If we are the resident agent, my office monitors the filings and nags the company to get the list filed.

2. You have to get a Nevada state business license. Again, there's an annual fee of $100. Our office assists our clients in preparing and filing the application for the Nevada business license.

   Warning! When you sign the List of Officers, you should know there is a sentence which requires you to state under penalty of perjury that the company has complied with the business license law. This may be a trap for the unwary or the uninformed.

3. You must get a federal employer identification number (EIN). The company uses this number in connection with all tax filings.

What happens after the company is formed?

Now that you've incorporated, don't blow it by carelessness.

• Remember that a corporation is a separate legal entity and that you have to treat it as such.
• Keep your corporate funds separate from your personal funds.
• Make sure your company is formally named as the contracting party in your business dealings and agreements.

• When you sign on behalf of your company, make sure you use your title as "President, etc." The same thing goes for your business cards - you are the "President," not the "Owner." In fact, get rid of "Owner" from your vocabulary.
• It's a good idea to hold formal meetings of Shareholders and Directors at least annually and to keep minutes of those meetings. You can hold a joint meeting, or you can have the Shareholders meet separately from the Directors.
• Remember to file your annual list of Officers on time.
• Sometimes it may be necessary to sign a personal guarantee. This introduces a whole new liability issue. It's important enough to deserve a page of its own. For more information about personal guarantees, see the Personal Guarantee page.
• If you have to go to court, you'll probably need an attorney. Corporations generally cannot represent themselves except perhaps in Small Claims Court.

Incorporation forms and fee information for every state Click here for State by State links





We'd like to be your Nevada small business attorney and to help you with your corporate needs. Click here for a no-charge 1/2 hour consultation with Dave Guinan.



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