A company is a legal entity that has its own legal status separate from its owners. It can own property, incur debt, enter into contracts and sue or be sued, and is managed by people known as directors and company secretaries. It’s generally easier for companies to obtain finance from banks and investors because it is seen as a trusted entity. This business structure can also protect its members’ personal assets from the company’s liabilities if it fails. It’s more complicated and expensive to set up than other structures, but it can be a great option for businesses that expect large revenues or want the flexibility of using losses to offset future profits.
Whether you choose to start a corporation or an LLC, the first step is to open a bank account in the name of your company. This will help to separate your personal funds from any business debts and obligations, as well as allowing you to claim the company’s tax deductions. Getting professional help with this process is strongly recommended, as mistakes can be costly.
Once you’ve established your company, the next step is to file articles of incorporation with your state. This process varies from state to state, but will typically include the company’s memorandum of association, its directors and shareholders, a registered agent, and its corporate bylaws. Bylaws are the rules that determine how your corporation is governed. They may also be referred to as an operating agreement or a certificate of incorporation. set up a company