법인설립절차 is very important because it forms the legal basis of your business. If you are starting a business, you need to incorporate and register it with the local government. When it comes to Incorporation, there are a few legal points to keep in mind.
Limits Of Liability
Incorporation determines your business' limits of liability, which is basically the amount of financial responsibility that you as an owner are willing to bear. Usually, when you incorporate a business you have to register a maximum liability company with the local government. After you register your maximum liability company, you can add more shareholders (owners) to the company without worrying about paying more tax liability. Your company's registration determines the amount of insurance coverage you can get for it, as insurance providers won't want to cover your entire company's liability when you are just a few shareholders.
EIN (Employer Identification Number)
An EIN is a nine-digit number that acts as your business' social security number. It is used to identify you as an employer when you register with the IRS and make your first payment. You must apply for and register your EIN with the IRS within 10 days from the date your business is incorporated. Your EIN will be sent to the IRS by your business' registered agent; it will not be issued or sent to you directly by the IRS. You can get an EIN from the IRS website, here. Once you have registered your EIN with the IRS, you can use it to identify yourself as an employer when you file your business' tax returns. You also need to set up a payroll account for your employees and keep track of payroll-related information, including W-2 forms and 1099s. If you fail to register your EIN within 10 days from the date your business is incorporated, your business will not be able to operate until you register it.
Filing Documents
Once you have registered your business, you need to fill out and send to the IRS various forms, including an income tax return, an Employer's Quarterly Tax Return (Form 940), a corporation/partnership income tax return (Form 1040), and a business report (Form 5472). You also need to file a memorandum to the county clerk in the county where you are registered concerning the formation of the company. In addition, you must file a foreign corporation's report if you are incorporated in a foreign country.
Keeping Good Records
You must keep good financial records for your business, including receipts, expenditures, and other relevant documents. You must also maintain minutes of shareholders' and directors' meetings, and preserve them for six years after the date of the last meeting. Shareholders and directors must also keep the company's registry book and records of stock transfers for seven years after the date of the last transfer. If you run a business, you need to keep good records so you can prove what you have done. You also need to make sure that you document any wrongdoing that may occur while you are in charge of the business, so that people know you are acting in the best interests of the business. When keeping good corporate records, you should consider setting up a good bookkeeping system, which can be highly beneficial. You should also hire an accounting professional to help you run your business and keep good financial records.
Protecting Your Business' Assets
Your business' assets are what will your business use to carry out its operations. This could include money, inventory, and property. When you incorporated your business you registered it with the local government, which means that the government now has a legal claim on your business' assets. The government can request, and in some instances make, a court order for your business to turn over its assets to the agency requesting the order. This is called an involuntary bankruptcy and can be very harmful to your business. One way to protect your business' assets is to set up a business account with a banking institution, which can be highly beneficial. Keep your business assets in the bank account and make sure that the bank knows that the money in the account is there to protect against claims from creditors. You should also consider obtaining liability insurance for your business.
Changes In Ownership
You must update your business' registration when you change the business' ownership, as the registration is reviewed and updated on a periodic basis. If you are the sole owner of your business, you don't need to do anything. If you are the owner of a corporation, you need to file a notification of change in ownership with the county clerk in the county where you are registered. You must also file a notification of change in ownership with the IRS.
Bylaws
Your corporation's bylaws control its internal operations and the relationships between its members. Every corporation must have bylaws, and you must write them by the end of the month following the month your business is incorporated. Your business' bylaws should be simple and easily understood by all shareholders, and they should also be comprehensive enough to cover all of the business' operations. Your corporation's bylaws can be online, here. You should also consider consulting a lawyer or an accountant to help you write your business' bylaws.
Incorporation is a legal process that determines your business' limits of liability and sets up the necessary financial records and systems to operate. In most cases, incorporating your business is a simple and straightforward process, however, it still requires a bit of research and planning to make sure that you do it correctly. When you have a business that is just for fun, you can do it yourself using a service like this one to form your own limited liability company. Don't forget about the many benefits that come with incorporating, including the ability to take out loans against the value of your business, protection from lawsuits, and better access to insurance coverage.