Busines who shelter multiple investors or shareholder under their wings makes corporate-decision making easier as everyone can contribute their input on the table during discussions. This also means more resources to fund its operations as it continues to grow and expand into other opportunities. The company incorporation certificate will be your first step to establishing your corporation. Learn more about this crucial document below.
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What Is a Company Incorporation Certificate?
A company incorporation certificate is a document that verifies the establishment of a company or corporation. This shows that you’ve already registered your brand. It’s issued to entrepreneurs who wish to form a corporation. It’s an important business requirement when registering for taxes, doing a recruitment plan, or opening a corporate account.
Why Incorporation is Good for You
Although there is more sole proprietorship business than corporations in the US, the record states that there are still 1.7 million C corporations and 7.4 million S corporations and partnerships. The figures come with no surprise as small businesses owned by families, and private individuals still dominate the country’s microeconomy. On the other hand, large brands are leaning into corporations because of their benefits. Here are some of them:
1. Tax privileges. Incorporating a business has tax benefits. This means reducing its tax liability through cuts in production, employee salary, benefits, and insurances.
2. Liability limit. The corporate entity operates separately from its shareholders. This means that the business owners do not have to answer to the liabilities of the business. What challenges the business is facing won’t be able to affect its owners’ personal assets.
3. Share transfer. A corporation’s ability to transfer and sell its shares from one shareholder to another makes it a profitable pool for an investment plan. It’s also easier to invite more shareholders and raise investment capital as the business’s operations flourish.
4. Perpetual life-span. Unless the business fall and never recovers, a corporation can live on for a long time. The easy transition to one owner to another makes invincible to the withdrawal of shareholders or death.
How to Make a Company Incorporation Certificate
Here are some ways on how to make a company incorporation certificate:
1. Provide Details About Your Corporation
It’s important to note that before you start putting your certificate together, it’s helpful to know what the contents it should hold. This is the same as the incorporation certificate. To get started on your certificate’s details, start by providing the details about your corporation. This includes the corporation’s name and address. You should also include the total number and the value of shares of your company. It’s also necessary to mention the duration or timeline of the corporation to avoid being rejected. This needs to be accurate in your document to avoid mishaps in the future. As for your business name, think of a good one that’s unique and available. You don’t want to go through the trouble of changing it later on.
2. Specify the Reason for Corporation
If your state doesn’t require a specific purpose on your certificate, here’s a tip: be generic. A simple “to engage in any lawful activity according to the corporation’s purpose” should be enough to cover your operational plans. However, if there’s a need for you to clarify your intent, opt for a general statement still. For example, suppose you’re offering writing services. In that case, you can twitch the mentioned sentence a bit and say “to engage in any lawful activity and provide writing services according to the corporation’s purpose in this state.” This gives you flexibility within your operations to perform transactions related to your industry.
3. Include the Right Names
Aside from the details about the company and its purpose, another important content of your certificate is the names of the incorporators. Include these among the details on the draft so you can easily arrange them on the certificate format later on. An incorporator can be an individual or an entity responsible for incorporating the business. The lawyer preparing your document can be the incorporator along with the company’s board of directors. These names are essential to completing your certificate.
4. Keep the Overall Layout Simple
The purpose of an incorporation certificate is a license. Hence, it’s a valuable document to your company that should remain safe on your many records and documentation rather than a display, like the other certificates. It’s unnecessary to include design elements and color shades when making it. It’s a formal business document. Use formal fonts and keep it readable. Keep the layout basic and simple, like you would for any business papers.
FAQs
Are the company incorporation certificate and the articles of incorporation the same?
Yes, the company incorporation certificate is the same as the articles of incorporation. Both of them serve the function of licensing a corporation.
What are the different types of corporations?
The different types of corporations are:
- Regular corporation
- S and C corporation
- Statutory corporation
- Nonprofit corporation
- Professional corporation
- Quasi-closed corporation
- Limited liability corporation
Where do you file a certificate of incorporation?
You need to file the certificate of incorporation to your state’s regulatory body, most commonly the Secretary of the State.
They say a business starts with one. And when people see how successful you’ve been, they will want to share the same gain. The certificate of incorporation is not only a mandated business requirement but a testament that you’re far from where you’ve started. Go through our high-quality collection of incorporation certificate templates and get yours now!
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