When to File Articles of Incorporation for Your Business
When forming a business, understanding the timing and process for filing articles of incorporation is crucial. This article outlines when to file these documents and their significance in establishing your business entity.
When to File Articles of Incorporation
Definition and Purpose
Articles of incorporation are foundational documents required to legally establish a corporation with the state. Filing these documents is essential for creating a C Corporation, as they formally register the business entity and outline its structure.
Timing for Filing
- Before Obtaining an EIN: It is recommended to file your articles of incorporation before applying for an Employer Identification Number (EIN). The articles serve as the official record that your business exists, which is necessary for obtaining an EIN from the IRS.
- Post-Incorporation Setup: Once the articles of incorporation are filed and the corporation is officially formed, you can proceed with additional steps, such as issuing shares of stock to founders and documenting ownership through shareholder agreements.
Importance of Filing
Filing articles of incorporation is crucial for:
- Legal Existence: It establishes your company’s legal status, allowing it to operate under state law.
- Compliance: Ensuring compliance with both state and federal regulations is vital for avoiding legal complications in the future.
- Equity Assignment: Proper documentation of equity assignments occurs after filing the articles, which helps prevent disputes among founders regarding ownership.
Conclusion
Filing articles of incorporation is a critical step in the business formation process. It should be completed before obtaining an EIN to ensure your corporation is legally recognized. This process not only establishes your business's legal existence but also sets the stage for compliance and equity assignments among founders.