How to Start Your Own Inc
Step-by-Step Guide

Starting a corporation (INC) is an exciting way to build a business that can scale, attract investors, and enjoy certain legal protections. An INC, or corporation, is a legal entity that is separate from its owners, providing liability protection and a structured way to operate a business. Here’s a step-by-step guide to starting your own INC:

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#1 Choose Your Business Structure and Name

Before forming your corporation, decide if incorporating is the right business structure for you. Corporations offer liability protection but come with more regulatory requirements compared to other entities like LLCs or sole proprietorships. Once you’re sure, choose a unique name for your business. The name must comply with your state's regulations and typically include “Inc.,” “Incorporated,” or a similar designation.

Tips:

• Check with your state’s business registry to ensure the name is available.

• Consider reserving your domain name for your website at the same time.

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#2 File Articles of Incorporation

The Articles of Incorporation is the official document you must file to legally form your corporation. This document includes basic information about your business, such as:

• Business name

• Business purpose

• Principal office location

• Number of authorized shares

• Information on the initial board of directors and incorporators

You’ll need to file these documents with your state's Secretary of State office and pay the required filing fees. Once approved, your corporation is legally recognized.

Tips:

• Filing fees vary by state, typically ranging from $100 to $500.

• You can do this yourself or hire an attorney or online incorporation service.

 

#3 Create Corporate Bylaws

Bylaws outline the internal rules and procedures for running your corporation. They specify how decisions are made, how meetings are conducted, the roles of officers, and the responsibilities of shareholders. While not always required by law, having corporate bylaws is crucial to ensuring smooth operation and can help avoid disputes.

Key elements in bylaws:

• Board of directors structure and election process

• Shareholder rights and responsibilities

• Procedures for annual meetings

• How corporate officers are appointed

 

#4 Appoint a Board of Directors

The board of directors is responsible for making important decisions for the corporation, overseeing management, and protecting shareholders’ interests. Initially, you’ll appoint directors when you file the Articles of Incorporation, but as your company grows, the board may change or expand.

Tips:

• Typically, small corporations have 1 to 3 directors.

• Directors don’t have to be owners; they can be outside experts.

 

#5 Issue Stock

A key feature of corporations is the ability to issue shares of stock. Even if you’re a small business with only a few owners, you’ll need to issue shares. Corporations are required to track their stock issuance and maintain records of shareholders. Shares can represent ownership and influence over the company.

Steps:

• Decide how many shares you’ll issue and to whom.

• Create a stock ledger to document each issuance.

Tip: If you plan to raise capital from investors, decide how many shares to keep for future fundraising efforts.

 

#6 Obtain Necessary Permits and Licenses

Depending on your industry and location, your corporation may need various business permits and licenses to operate legally. Check federal, state, and local requirements to ensure compliance.

Common permits/licenses:

• General business license

• Zoning permits (for physical locations)

• Industry-specific licenses (e.g., health permits for food businesses)

 

#7 Apply for an EIN

An Employer Identification Number (EIN) is required for tax purposes and is essentially the corporation's Social Security number. You’ll need an EIN to open a business bank account, hire employees, and file taxes. You can apply for an EIN for free through the IRS website.

 

#8 Open a Business Bank Account

Once your corporation is formed, it’s important to keep your personal and business finances separate. Open a dedicated business bank account under the corporation’s name. This ensures financial transparency and makes it easier to track income and expenses.

Tips:

• Choose a bank that offers low fees and caters to small businesses.

• Set up business credit cards and merchant services (if needed) to streamline transactions.

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#9 Hold Your First Board Meeting

After filing the necessary documents and establishing your corporation, your board of directors should hold its first official meeting. During this meeting, the board will adopt bylaws, appoint officers (CEO, CFO, etc.), and take care of any other essential corporate actions.

Typical agenda items for the first meeting:

• Approve corporate bylaws

• Issue stock certificates

• Elect officers

• Approve corporate banking resolutions

 

#10 Comply with Ongoing Corporate Requirements

Once your corporation is established, it’s important to meet ongoing state and federal compliance requirements. This includes filing annual reports, holding shareholder and board meetings, and keeping detailed corporate minutes. Failure to meet these obligations can result in fines or, worse, losing your corporation’s legal standing.

Ongoing requirements:

• File annual reports and franchise taxes with your state

• Maintain corporate records, including meeting minutes

• Comply with tax filing obligations