Owning your own corporation is easier than it sounds. You can own your own corporation in about an hour, and for about $200 if you’re really committed.
None of this information is meant to replace the advice of a trained professional. Don’t sue me. That being said, in my humble opinion, if you found this website you are more than capable of getting started in this process.
What is a corporation?
Corporations are their own entities…meaning they pay taxes, they can be sued, they own things, hire people and sign contracts.
Why start a corporation?
Protect yourself against lawsuits, save on taxes.
Types of corporations:
Corporations are set up under under the state in which you register them. They are all basically the same, with a few differences. For instance, Nevada corporations are the best for taxes. It is easiest to set up the corporation in the state in which you operate.
|Types:||C -Corp||S – Corp||LLC|
|Taxes:||Pays taxes||Flow Through Taxation||Pays taxes|
|Limitations:||Few||75 Shareholders max, All Shareholders U.S. citizens||Must be fair to all concerned|
|Suggested For:||Big Business; non- U.S. citizens||Mom and pop, electricians, plumbers etc.||Complicated deals: i.e. one person puts in money, the other an idea, the other the work.|
Steps to set up a corporation:
Read through all these steps before you act on anything
1. Choose a name
The name must be unique to the state. Link to Hawaii Business Names
2. Choose how many shares your company will have. Recommend 1000 at $0.10 a piece.
If you are the only owner of the corporation, then it’s easy. You own all 1000 shares. If you have a partner, then it’s 500-500.
3. Sign up for a corporation.
Recommend either a trusted accountant or a web site.
4. In Hawaii, your GE tax license will be mailed to you. Photocopy and file it.
(This next part seems silly but is legally required.) You will need 3 pieces of information.
1. The name of all incorporators: your name and whoever else is invested in the business with you.
2. An operating business address. This can be your home address.
3. The date on which the the business was founded. Today will be fine.
5. Send a letter of a notice of first board of directors to all incorporators. Even if it’s just you, you still need to send this letter to yourself. I have included my incorporation documents on this website. Feel free to use them. Simply change my name to your name, edit the dates and the business location.
6. Have a Board of Directors meeting. This can be you sitting at your kitchen table. You simply need to create a document that looks a lot like this.
7. Write a mission statement. It might look like this.
The mission of ___________ is to provide the very best service and product to our customers at fair prices, in a pleasant work atmosphere for employees, which offers mutual support and opportunity for growth in a moral and ethical environment.
8. Write By Laws for you Corporations. Feel free to edit and delete this document to tailor it to your personal needs.
9. Articles of Incorporation are important too.
10. Next you want to print out a Certificate of stock.
11. Go to a bank. Pick one that has the lowest minimum balance required. My bank charges me $7 a month each month I am below $2000.
The Bank will need a the following documents:
1. Articles of Incorporation
2. Notice of First Meeting
3. First Board of Directors-Minutes
5. Photo copy of General Excise Tax License (Hawaii)
6. Federal ID #
7. Stock Certificate
12. Congratulations! You are incorporated. Photocopy everything and store these files in 2 different places, to keep them safe.