Setting Up a Corporation - Simple Steps
By David Gass
A corporation is a legal entity that separates the persons
owning or operating a business from the actual business itself.
They are set up to protect individuals from a range of possible
damages and obligations that might occur as a result of doing
business. Unlike other forms of business registration the
owners of a corporation have no responsibility for the debts
of the business and their liability is limited to the number
of shares that they hold in that corporation.
Corporation law has been around for a long time and the oldest
corporation in the United States is the Harvard Corporation
which was established in 1650 to look after the business affairs
of Harvard University. The act of incorporation is the basic
of all corporation law and in addition to provided limited
liability for owners and shareholders this type of business
registration is very common for all large and medium sized
companies in the Unites States.
Along with the provision of limited liability corporation
law also sets out a series of standards and regulations that
corporations must adhere to in order to maintain their incorporated
status. They include having a board of directors that is responsible
for the operation and governance of the corporation in accordance
with the state in which it is incorporated. Shareholders of
the corporation elect the board of directors and the board
then assume what is called the fiduciary responsible to put
the interests of the corporation first in all decisions and
deliberations.
Most corporations have a Chief Executive Officer or President
who is the spokesperson for the corporation in all public
matters and a treasurer who is responsible for maintaining
the good financial health of the organization. Other officer
positions may be created by the corporation as provided for
under the applicable corporation law.
Corporations are created by filing articles of incorporation
with the government and these articles contain information
about the general intent of the corporation, the number of
shares that the corporation intends to issue and the addresses
and names of corporate directors. After approval by the regulatory
body the board of directors of the corporation meets to create
the bylaws of the corporation and proceed to open for business.
There are fees associated with incorporating a business and
legal and tax advice is almost a prerequisite to filing for
incorporation, but the separation of personal and legal liability
is a very attractive asset to incorporation and most businesses
are quite willing to pay these small costs to protect the
individual interests of its shareholders.
David Gass is President of Business Credit Services, Inc.
His company publishes a weekly e-newsletter on Starting and
Growing a Small Business at http://www.smallbusinessconsulting.com
You can sign up for their free newsletter by visiting http://www.smallbusinessconsulting.com
Article Source: EzineArticles.com
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