Deciding to form a business entity is often a wise choice for most businesses. What seems simple can quickly become confusing given all the legal jargon.
If you want to incorporate, you have a couple of different choices regarding how to go about the process. Let’s take a quick look:
1. The first choice is to do it yourself. In some states, this is a fairly simple process. In others, it is a nightmare. It all really depends on your level of knowledge.
2. Your second choice is to use a cheap online service. They will typically incorporate you for a few hundred bucks, but then you are on your own. They do not provide you with any advice, so you end up with a corporation and have to figure out how to assign ownership, make tax designations and so on.
3. The third choice is to use a business attorney such as myself. The advantage is you get the corporate entity and advice on how to function properly and within legal requirements. The downside, of course, is this is your most expensive option.
Regardless of how you go about the process, you are going to quickly learn about someone called the incorporator. Given the fact we are talking about law, it is rather shocking that the incorporator actually serves the role the name suggests. He or she will sign and file the incorporation documents. Why? Well, there is one primary reason- it is faster.
Most articles of incorporation that must be filed with the Secretary of State are designed to be as short as possible since there is little reason to put much information in a public document. As the incorporator, the service or attorney filing the papers can print them out and fire them off as opposed to sending them back and forth with the client.
Once the corporation is approved, the incorporator will elect a board of directors to run the corporation. The board will then initiate the stock sales process and so on. The incorporator will resign from his or her position and off you go as a corporation.
It is a rare day in the law when a title actually means what it says. With incorporator, that day is here.
Richard A. Chapo is with SanDiegoBusinessLawFirm.com - providing California incorporation services .