Most people think starting a business is a simple thing that involves putting together starting capital, stocking, and immediately jumping into operations. That could be an easier way of creating an illegitimate business that will be closed soon and owners arrested and charged. To acquire legitimacy, a company must be registered strictly with the state’s incorporation laws. Registration will help you deal effectively with the risks faced by sole proprietors, which is a fundamentally unlimited liability; your personal life and assets are not separated from the business and can be used to salvage the business’ debts and liabilities.

Incorporating your company is, therefore, a great idea that comes with lots of advantages, including more trust from potential customers and those we transact with and the freedom of limited liability; there is a separation between your assets and the assets of the business, and your assets cannot be used to salvage the company in case of debts or bankruptcy.

For most people, the challenge has to do with the process of incorporation. Engaging professionals like company formation Singapore can make this incorporation process easier. Their experts will guide you stepwise regarding incorporation with complete transparency, giving you the confidence to build a reliable foundation for your business. Otherwise, a lot of paperwork and documentation is involved in securing a corporation. Here are seven documents you must have before starting a corporation:

1. Name Reservation Form

The name reservation document establishes a unique name for your corporation that any other business cannot take. How is this obtained? When you want to establish your corporation, you go through the process of name search by telling the registrar your potential name, and they run it through the system. This step is quite integral because not once, not twice, will you find that a corporation is already registered under the name you are thinking about.

The process can take a little while as you try to find an unoccupied name to avoid confusion when two different corporations are registered under a similar name. Sometimes you can be asked to list two or more name options in order of priority, but the final document will only have either of them.

2. Action Of Sole Incorporator

A sole incorporator refers to the person who came up with the novel idea of starting the corporation. He files the certificate of incorporation with the state and may not have any vested interest in retaining ownership of the company. The purpose of the action of the sole incorporator is to release the corporation’s incorporator from their incorporator duties after the corporation has been officially formed. As the sole incorporator is released from his duties, a board of directors takes administrative responsibilities. For clarity and good transition, the names of potential directors can be included in this document.

3. Articles of Incorporation

Articles of incorporation contain essential information. It brings the structure together and gives essential information about the corporation. It is important to note that the content of the article of incorporation may differ based on state laws and expectations in diverse geographical regions.

Typically, you will find the following in an article of incorporation:

• The name of the corporation. This resulted from the selected option from the name search and reservation.
• Name and Contact information of a documented agent.
• The principal place of the business. This is the geographical location of the operation and may include a street address in some cases.
• The corporation is authorized to issue the number of shares and classes of stock.
• The statement of purpose. It states what the business intends to do and must not necessarily be specific to finer details.
• Names and addresses of incorporators and directors.
• The corporation’s duration. As you can preempt, this section may not have a definite answer because most companies intend to operate as a going concern, meaning they intend to be perpetual.

4. Company Bylaws

Company bylaws are the most necessary documents a corporation should have. It is of crucial importance and is non-negotiable, as the life and activity of the incorporation depend on it.

Typically, company bylaws will contain the following:

• How the corporation will be operated.
• How meetings are held and conducted
• Corporation’s voting requirements
• Procedure and grounds for removal from office.
• Dissolution of the corporation

Bylaws, therefore, act as the group’s constitution and is the document of first resort in case of conflicts or misunderstanding.

5. Minutes of the Initial Meeting of the Board of Directors

This document contains the minutes of the maiden meeting of the board members, the meeting that gave life to the corporation. The board of directors holds a meeting to elect and appoint the corporation’s officers. Further, they put the house in order by working on such issues as the adoption of bylaws, authorization of Bank accounts, and stock ownership.

The initial meeting of the board members should ideally be conducted in person. Otherwise, the unanimous adoption is accepted, after which it is signed into action. This meeting shapes the company and sets its operations running, and influences its success in a more significant way.

6. Shareholders Agreement

Shareholders’ agreement acts as a compliment to the bylaws in a more specific manner. It sets out the rights and obligations of each shareholder in a corporation. As you can guess, this document influences how the corporation will run, and that is to run smoothly. It addresses crucial concerns such as the transfer of shares, management, control, profits, and distributions of shareholders and officers.

Shareholders agreements may comprise provisions like confidentiality and intellectual property processes that the shareholders must abide by, thus helping each one to understand the operations of the corporation. Further, it provides procedures for handling such eventualities as the death or incapacitation of a shareholder.

7. Non-Disclosure Agreement

The non-disclosure agreement (NDA) is designed to protect private information such as the list of clientele, financial records, and back-office operations. The purpose of this document is to establish and preserve a confidential relationship between a corporation and business partners, contractors, employees, et cetera.

Conclusion

Incorporating a business is a significant step as it saves you from the risks that sole proprietors are predisposed to and affords you additional capacity from partners and a much more skill set. This is not a walk in the park; you need thorough information to understand what to do. We have discussed seven documents you need to put together to meet the bare minimum for starting your corporation.