There may be a substantial amount of paperwork and legal formalities to incorporate a business; but if your business is a good candidate to file as a corporation, there may be significant benefits. Legally, a corporation is viewed as a separate entity or “person.” Meaning, that if the corporation is sued, those who own and manage it are likely not personally liable, and cannot be sued themselves, provided it is properly set up and maintained.
Here is a list of steps to contemplate when incorporating a business in Montana:
- Name your corporation.
- File the correct Articles of Incorporation.
- Appoint a registered agent.
- Set up a corporate records book.
- Write corporate bylaws.
- Appoint initial corporate directors.
- Hold your first board of directors meeting.
- Issue stock to the shareholders.
- Follow Montana annual report requirements (or your state incorporation requirements).
- Determine other state tax and regulatory requirements.
- Decide if you will file as S corporation status.
Forming a corporation may be prudent for a combination of reasons, including limited liability and tax savings. Businesses with a substantial amount of profit could save tax dollars by filing with a corporate status. Family run businesses that wish to divide ownership to the next generations may accomplish this as a corporation. Also, some corporations file as such to attract outside investments and issue stock.
Following the formalities laid out by the law at all times is essential to qualify for the legal protections offered by corporate status.
Contact our Business Lawyers at Angel, Coil & Bartlett today for a legal consultation and expertise when forming a corporation.
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