A lot of start-ups make the mistake of paying, or over paying, for things they don’t really need or even want at the formation stage. Be smart and get practical. We’ll give you the “been there, done that” tips. We have literally created hundreds of Companies, and although it is NOT legal advice, this checklist will tell you how to get things for free (or at very low cost) as part of your formation process.

Everything you need for Corporate or LLC formation can generally be done with $10 or less (excluding the investment in your Formation Package). You shouldn’t need to spend money on an overpriced service or product, because you think it’s some sort of “legal” requirement.

Important Note: We suggest not spending hundreds or thousands of dollars on office space, website names, email addresses, brochures, and other marketing materials until after you create your Company.

Steps to Take:

• Decide on a business name for your entity:
  When selecting your name, please be aware of legal issues such as trade names and deceptively similar business names. Think about marketing and domain names in relation to your business name too!
• Select the state where the company will be created:
  Where will the principal office be registered? Will your company need to be qualified to transact business in other states? Consider any additional annual filings or fees.
• Select a type of entity:
  Are you aware of the different types of entities and their attributes? What’s your best choice based on legal, tax, and commercial implications?
• File the appropriate formation document(s) with your state agency:
  The name of this document differs by state; sometimes it’s called a Certificate of Formation, Articles of incorporation, or Articles of Organization. Before you file, make sure your business name meets statutory requirements and is available for use.
• Determine your business location and take these steps:
  • Home-based: check zoning requirements.
  • Other location: Lease office or retail space and obtain the necessary furniture, equipment and supplies.
• Obtain an EIN (see my blog for How To Obtain an EIN for FREE in 5 Minutes):
  It’s easier if you know whether your company will be taxed as a disregarded entity, partnership, C-Corp, or S-Corp.
• Obtain a state taxpayer identification number.
• Create and sign an operating agreement, such as Bylaws or Company Regulations:
  Consider the rights of the owners, management, initial or on-going capital contributions, dissolution, and other issues.
• Conduct organizational meetings at least once a year.*
• Document your company’s organizational meeting with written Minutes.*
• Issue ownership interests with certificates and a transfer ledger:*
• Check your own state for other requirements, business certifications, licenses, etc. and obtain the necessary business licenses and permits.
• Ensure you comply with government requirements (e.g., unemployment insurance, worker’s compensation, OSHA, payroll tax requirements, self-employment taxes, etc.).
• Open a bank account for your entity:
  Take your formation documents and your EIN with you to the bank.
• Learn to sign contracts and agreements as a business owner.
• Set up your business accounting and bookkeeping.
• File state and federal tax returns (even if you don’t owe any taxes).

Other good business practices:

• Start establishing your business credit.
• Determine what business insurance is needed.
• Create any necessary contracts, service agreements and invoices so you can easily bill customers, track payments and keep records.
• Secure a domain name and create a website.
  When selecting your domain name, please be aware of legal issues such as trade names and deceptively similar business names as well as legal terms and conditions
• Create business cards, letterhead, envelopes, etc.

Starting a new business can be a fun and exciting adventure. But, the list of things you need to do to get it off the ground can feel rather daunting. If you get stuck on any of these steps, join us for Dish with Tish, our FREE monthly live Q & A to get answers to your questions.
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*Some states do not require this for LLCs, but we recommend this as a wise business practice for good governance.

This checklist is for informational purposes only and should not be construed as legal advice. You should seek the advice of an attorney before making legal decisions.