After Incorporating: Everything You Need to Know
After incorporating, there are several other tasks that you need to complete to make sure that your business can legally operate.3 min read
After incorporating, there are several other tasks that you need to complete to make sure that your business can legally operate. For instance, you will need to obtain a tax identification number for your company and may also need to register a fictitious name with your state.
Internal Company Documents
Once you have filed and submitted your formation documents, you need to draft the internal rules for your company. If you formed a corporation, these rules are known as your bylaws, and for a limited liability company (LLC), you'll write an operating agreement. With these documents, you can set out the rules for running your company, including:
- How your company will hold shareholder or member meetings.
- Which company decisions require a vote.
- How your company will issue stock.
- Responsibilities of corporate officers.
In addition to the above issues, the operating agreement of an LLC can include information specific to this type of business entity, such as:
- Member responsibilities.
- The process of transferring membership.
- Distribution of profits and losses.
Additional Company Registrations
Acquiring an Employer Identification Number (EIN) is one of the most important steps that you will need to take after incorporating. Without an EIN, you won't be able to open a bank account for your company or pay your required taxes. The IRS issues Employer Identification Numbers free of charge.
Some LLCs and corporations may also need to file a DBA, or fictitious name, registration. After registering a DBA, you can operate your company using a name that's different than the official name listed on your formation documents. You will need to register a DBA for every fictitious name that you plan to use.
After incorporation, every company should open a business bank account. Having a dedicated bank account for your business will prevent the mingling of personal and business finances, which simplifies tax reporting and other accounting tasks. Keeping business and personal finances separate is also crucial for maintaining the liability protections of company owners.
Licensing, Annual Reports, and Trademark Registration
Incorporating is the process of legally founding your company, but in many cases, you won't be able to actually conduct business until you've acquired a business license. Depending on the type of company you have formed and the rules in your jurisdiction, you may need local, state, and federal business licenses before you can offer goods or services to customers. In most cases, you can contact your local government to find out what types of licenses you need.
Whether you've formed a corporation or an LLC, you will need to make sure you file the correct annual paperwork with your state. For instance, in some states, your company will need to file an Annual Statement every year, along with the required fee. When allocating profits to company members or owners, you need to be sure that you're paying estimated taxes on these profits. You will also need to file an annual tax return at both the federal and state levels. Corporations must hold shareholders and directors meetings, and they must file the minutes of these meetings with the state.
The benefit of incorporating your business is that you can prevent other companies from using your business name in the state where you incorporated. If you want to protect your company name nationwide, however, you should consider filing for a trademark registration. You can file your registration with the United States Patent and Trademark Office (USPTO). If your trademark gets approved, you can stop others from using your company name and will gain the ability to file a federal lawsuit for trademark infringement.
Using Business Contracts
Businesses that intend to work with third-party contractors and employees should be sure to formalize these relationships with the right documentation. Some companies, for example, may want their employees to sign a non-compete agreement to make sure they can't work for a competitor. If your company will frequently work with independent contractors and consultants, you should be sure to use an Independent Contractor Agreement to protect the interests of every party. Preparing these documents ahead of time will make hiring contractors and employees much easier.
When you sign contracts related to your company, you should be sure to sign using your company's official name. You should never sign a contract with your personal name if it's avoidable.
If you need help with the steps you should take after incorporating, you can post your legal needs on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.