A lot of businesses today are established as corporations, and these come with many benefits for business owners and their property. If you’ve yet to have your business incorporated, then it might be the next step you need to take to help your business rise and grow.
True enough, getting your company incorporated comes with a few advantages and disadvantages, but more on this later. For now, you might want to prepare yourself on how to incorporate your business as properly as possible, as this can be quite the process.
Guide To Incorporating
For starters, you need to understand that each jurisdiction has its own process when it comes to incorporation. Before you begin following this guide, it is a must that you consult with your local government’s laws regarding incorporation, as that can make a difference.
The very first step you need to take is to pick a name for your company. Keep in mind that this is something that’s going to stick with your corporation, so it is a must that you pick one that suits your business, and one that resounds with your customers as well. It will affect your future trademarks, service marks, and many other things.
Before choosing a name, consider many things first. For one, is the name already being used by another company? Another is that the name should be unique enough to stand out, but not unique enough to make it hard for people to remember the name.
Next comes another crucial matter, picking where you would want your company to be incorporated. As a general rule of thumb, you should have your company incorporated where it will do most of its principal business. However, consider other options too.
For instance, if you are overseas but want to incorporate in Singapore because that’s where your market is, the process is still possible. What you’d want to do is to hire a private limited company to help you with your incorporation overseas. Many business owners do this because they have a better market elsewhere.
Next, you’ll have to create the Articles of Incorporation, which are basically the details behind your company and its purpose. This document is usually two to three pages long and will include the following articles:
- Corporate name – defines the formal name of the company or corporation.
- Purpose of corporation – dictates what the company plans on doing. Also includes a statement on how the corporation will only partake in lawful business activity.
- Duration – will tell how long the duration of the incorporation is, but truthfully, you wouldn’t want to put a limit on this.
- Authorized capital – shows the number of shares that the corporation will allow in circulation.
Once all these are set up, it’s time to begin building the people that will be the backbone of your corporation. These include stockholders, the board of directors, and of course, the employees who will work for the company as well. It can be a long process, but with enough patience and the right people, you can make it work in no time.
Ideally, you’d want to get help with the incorporation process. There are some firms that will and can assist companies when it comes to incorporation. Consider availing such services as these can make the process a lot easier. It also lessens the chances of you making a mistake, of course.
Pros and Cons of Incorporation
Incorporation is a lot of work, but it’s worth it. For one, incorporation will unlock the maximum capacity of your business in terms of growth and capacity. People are also going to see your business in a better light once it undergoes the process of incorporation.
The biggest upside to incorporation is that it lessens the legal liability that is put on you as an owner. These include debts and legal obligations. In other business structures, your personal credit and legal responsibilities are going to be affected by what happens to the company.
In terms of cons, the biggest is that setting up a corporation can be quite expensive. It’s much more expensive as compared to single proprietorship or partnerships at that. Unless you have the budget for it, incorporation might not be the best option for your business currently.
Incorporation is necessary for the growth of your business. It’s something that you might want to consider if you want your company to become more than what it is today. While the fees and the process are extensive, what you get in return after incorporation will be well worth it.
