You've thought of a business that won't nosedive after
the holidays, assembled a team, found cheap office space and are
ready to launch your company. But first, you'll have to jump
through that paper hoop held by the ringmaster, the Clerk of the
State Corporation Commission (SCC), known in some states as the
Secretary of State. It's essentially your one-stop shopping
center for setting up a business, whether it's a partnership, a
corporation, a limited liability company or another entity.
You'll deal with this organization when you start your
business and from year to year as you file annual reports, pay
yearly dues or change details of your organization (directors,
address of record, number of shares and so on). Although you might
eventually delegate these tasks to someone else, it helps to know
the basics of your own SCC--or, if you like, your "state
paperwork commission."
What it does: Your SCC regulates many business and
economic interests. Its powers range from setting utility rates to
serving as the central filing agency for corporations. For your
purposes, it's like a college registrar: You need to show up
several times a year to hand over checks and documents. If you
don't, your business might cease to exist!
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Basic filings: First, check to see that the name you want
to use is available through the commission or secretary of state.
Next, file your organizational document, usually called
"articles of incorporation." These contain a
corporation's name, type of business, number of shares you can
issue, street address, registered agent and board of directors.
Send a check for the required fees with your articles. In some
states, you need to publish your articles in a newspaper.
That's usually it for starters; a yearly fee and annual report
will be due on the anniversary of your incorporation.
Keeping in touch: Whether filing an annual report,
proofreading and amending articles or dissolving a corporation,
most business can be conducted by snail mail, telephone or
e-mail.
Using the net: Many states have complete websites that
can help you get started, as freelance journalist Todd Carter found
out: "In Michigan, the SCC makes it very easy to print
registration forms from its website. I downloaded a form to start a
limited liability company, filled it out in two minutes and sent a
$50 check. A few weeks later, I got confirmation that it went
through."
Other states have similar set-ups: Arizona's corporate website, for instance,
contains an FAQ section as well as a "corporation filing
checklist." In Kansas, you'll find FAQs and a downloadable
corporate handbook.
Still have questions? There are also websites like
Bankrate.com,
which includes a map of the United States that lets you click on a
state for information on its laws, regulations and tax demands on
new business owners. Also try Findlaw.com; go to the "Small Business
Center" for information on business formation, financing,
employment issues and operations. And pick up a copy of Corporations: Laws of the United States
(Nova Publishing, $16.95, 800-462-6420) by Daniel Sitarz or
Form Your Own Corporation and Launch a Business
in Any State (Adams Media Corp., $19.95, 800-USA-JOBS) by
J.W. Dicks.
Any tips from the pros? Attorney Laurie Forbes, who
practices estate and business law in Northern Virginia, offers this
advice for dealing with the SCC:
- Use preprinted forms liberally but judiciously.
- Keep an index of names and phone numbers of people who've
been helpful to you.
- Use the web as an initial source for information. If you
don't find the information or the form you need within five
minutes, pick up the phone and try the toll-free number. If you end
up on hold, try the non-toll-free number.
- Always keep your company in good standing. Don't let the
deadlines for filing papers slip.
- Tough as it is, try to make friends with any bureaucrats giving
you a hard time. Compliment them if you can.
Most businesses start in someone's mind, but they must exist
on paper, too. Now you know how to do it.
Joan E. Lisante is an attorney and freelance writer who
frequently writes about business issues and premature aging among
parents of teenagers.