So, you are considering starting up your own Colorado business. It should be a simple process, right? Not so fast. Business formation actually requires some legal finesse. Even though it is possible to establish your own business without help from an attorney, it is not always advisable, particularly if you are looking to incorporate a large corporate entity. Today, we walk you through the basic steps of establishing your business, so you can be prepared when the big day arrives.
The general process of incorporation involves first choosing your business name and appointing directors for your corporation. You also want to determine the type of corporation you want to pursue -- business formation can occur as a traditional corporation or a limited liability corporation, depending on your individual needs. Corporate bylaws must be drafted, board meetings must be held, and then stock certificates must be distributed to those who have invested in your corporation. Finally, your business must obtain all relevant licenses and operating permits that are mandated by the state of Colorado.
Each of these steps -- from naming your business to issuing the initial stock certificates -- require a great deal of care. For example, you need to make sure that your business name complies with state regulations and does not resemble the name of another existing entity. Further, ensuring that your board of directors is properly structured can take some extra time and consideration. Filing the appropriate articles of incorporation is a fundamental step that can have major implications for your C-corp or Sub-S corporation if it is not correctly completed.
The legal details of establishing your own business may seem overwhelming. In fact, it is critical to make sure that all of your t's are crossed and i's are dotted before you start operating. Without legal assistance, you could end up in dire straits come tax time -- or you could face securities violations. Thoroughness is definitely the name of the game when you are going through the entity formation process.
Source: FindLaw, "How to Incorporate a Business" Aug. 04, 2014