What to Do After Startup Incorporation
If you plan to incorporate your startup or you have recently incorporated, here are the things you need to do in order to keep your LLC or corporation up-to-date and compliant:
Create an Operating Agreement (LLC) or Bylaws (Corporation)
If you incorporate your startup by forming an LLC, you will also need to create an operating agreement. An operating agreement is a legal document that outlines the rules and procedures related to the operation of an LLC. Operating agreements define how your organization will be operated.
Operating agreements detail members and managers roles and responsibilities, how decisions will be made, how ownership may be sold or transferred, and how profits will be assigned and distributed.
From there, you can add as many provisions as you want, as long as they are not in conflict with your state’s or the incorporating state’s business law.
If you incorporate your startup as a corporation, you will need to create and adopt bylaws. In fact, this should be the first act of a corporation’s board of directors.
The bylaws of an organization are the procedures and rules that determine the management structure, decision-making process, and how your organization will be operated. Corporate bylaws are kind of like a constitution for your corporation. They describe how your company will be run.
Several states also require that your organization file an Action of the Incorporator when your directors adopt your company’s bylaws. The Action of the Incorporator is a document that officially announces the appointment of your directors and the adoption of your bylaws.
Recommend: Most startups work with an attorney to write their company’s bylaws. Read our guide on how to find a lawyer for your startup.
Obtain Licenses and Permits
In addition to registering your business, you will likely need to obtain a number of licenses and permits from your local, state, and federal government.
Here is what you need to know:
Local Permits and Licenses
Most businesses will need some kind of local business license or permit to legally conduct business within their town, city, or county. These may include anything from occupancy permits and food and beverage permits to special permits and licenses for signage, lighting, and noise.
Local licenses and permits vary widely by locality, so you will need to check with your local county clerk’s office about the types of licenses and permits required.
State Permits and Licenses
Most businesses are also required to file for a license or permit to operate legally within their state. The permits and licenses you may need vary widely by state and type of business.
Recommended: Use TRUiC’s Business License Guide to find business license requirements and resources for your state.
Federal Permits and Licenses
If your business falls under the regulation of any federal agency, you will also need to obtain the appropriate permits from that agency. These include commercial activities in:
- Alcoholic Beverages
- Firearms, Ammunition, and Explosives
- Fish and Wildlife
- Commercial Fisheries
- Maritime Transportation
- Mining and Drilling
- Nuclear Energy
- Radio and TV Broadcasting
- Transportation and Logistics
For more information on federal licensing, visit the Federal Licenses and Permits page on the US Small Business Administration (SBA) website.
If you are unsure of which licenses or permits you may need or just want some peace of mind, consider using a business license service to do the work for you. Check out our picks for the best business license services.
Get an EIN
The Employer Identification Number (EIN) is basically a Social Security number (SSN) for your LLC. Your EIN allows the IRS to identify your business and keep track of your business’s tax reporting.
There are several reasons you need an EIN for your business:
- EINs are required for many business structures such as corporations, partnerships, and multi-member LLCs.
- EINs are also required if you have any employees.
- Most banks require you to have an EIN to open a business bank account.
You can apply for an EIN for free on the IRS website or by mail, by fax, or by phone.
For more information on how to apply, read our guide on how to get an EIN for free.
File a DBA
If you are doing business under any name except for the official name of your LLC or corporation, you will need to file for a “doing business as” (DBA) name with your state.
A DBA name — sometimes called an assumed name, trade name, or fictitious name — is easy to create and file.
You will need to conduct a name search in your state to make sure that no one else is using that name and it is available.
You should also do a domain name search as well to ensure that you can purchase the domain name associated with your company’s DBA. Even if you don't plan to have a website right away, it's a good idea to reserve the domain name to prevent others from acquiring it.
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The process for filing a DBA varies by state. For more information on filing a DBA in your state, check out our state-by-state guides on how to file a DBA.
Sign Legal Documents Properly
Anyone you do business with needs to know that they are doing business with a corporation and that you are acting on its behalf. This means that you cannot provide personal guarantees and must sign documents correctly.
Directors, officers, and those in management must clearly specify their role in representing the organization (i.e., Mellisa Smith, CEO, ABC Industries) when acting on the organization’s behalf or signing any documents. Signing documents in your personal capacity vs. signing documents on behalf of the corporation fails to establish the separation between your personal and business affairs and may jeopardize your corporate veil.
Your startups will also likely need insurance in one form or another. Some types of insurance, such as worker’s compensation or unemployment insurance, may be required by your state. Other forms of business insurance may be optional but are important to protect you and your company from disaster.
You may choose to carry several types of additional insurance, such as general liability, professional liability, property, or auto, among many others. Or, you may choose to bundle several types of insurance together in a business owner’s policy.
To learn more about the types of business insurance you may need or to search through our specific guides on business insurance recommendations in over 650 types of businesses, make sure to read our Small Business Insurance Guide.
When you are ready to start shopping for business insurance, read our guide on the best small business insurance companies.
Open Business Bank Account
A business bank account helps you separate your business and personal finances, keeps your corporate records organized, adds professionalism and legitimacy to your new venture, and helps prevent you from piercing the corporate veil.
The first accounts you will need to open are business checking accounts and business savings accounts.
We highly recommend reading our review of the best bank accounts for startups and entrepreneurs to help you choose the right bank account for your business.
Get a Business Credit Card
Credit cards are an important source of funding for startups and small businesses, and credit cards can provide some financial flexibility in between funding cycles, during slow periods, or for unexpected expenses.
To keep your business and personal accounts separate, you will need to open a business credit card rather than relying on your personal cards.
There are many different types of small business credit cards, each with its own mix of interest rates, fees, benefits, and rewards.
Read our guide on the best business credit cards to find the right business credit card for your business.
Hire an Accountant
Corporations are required to maintain accurate financial records for reporting to owners and shareholders, the state, and the IRS.
You will need to set up and manage your accounting and produce and submit accurate financial statements and reports.
There are a number of options for managing your accounting, such as hiring a bookkeeper or accountant or using small business accounting software.
Recommended: Schedule a consultation with a business accountant today to find out how much time and money your business could save on tax, payroll, and bookkeeping services.
Apply for a Trademark
When starting your new business, you will want to protect your business from any naming or branding disputes while ensuring that your business stands out. To accomplish this, you should consider applying for a trademark for your brand.
A trademark can be any word, slogan, symbol, design, or any combination of these that identifies the source of a business’s goods and services and distinguishes them from the goods and services of another party.
Trademarking your business through the US Patent and Trademark Office (USPTO) allows you to legally protect your company’s brand.
When you obtain a trademark, it prohibits any other businesses from operating under the same or similar names, words, slogans, symbols, or logos that may easily be confused for your company’s brand.
For more information on trademarks and how to protect your company’s brand, check out our guide on How to Trademark Your Business’s Brand.
Conduct Annual Shareholder’s Meeting
Most corporations are also required to hold annual meetings among their members, directors, and shareholders. At these meetings, corporations keep detailed records of any important decisions made by their owners or directors.
A corporation’s records are called “minutes” and are often kept in a “minute book” to keep track of periodic director meetings and annual meetings.
Properly kept corporate minutes help maintain limited liability status, add a layer of legal protection, and more.
Several companies offer customizable and state-specific corporate meeting minute templates online for you to use. See our review on the best corporate meeting minutes templates to find the best option for you.
File Biennial/Annual Reports
Finally, to remain compliant, you will also have to file regular state registrations, tax forms, and reports with the government and your owners or shareholders.
In most states, you will be required to file an annual report or reports with your state. This is to ensure that your corporation remains registered and compliant. You will also have to file any required tax filings with your local, state, or federal agencies.
In addition, you may also be required to file quarterly, biennial, or annual reports to your owners or shareholders.
The rules and regulations regarding your required filings vary by state and whether you are forming an LLC or a corporation. To learn more about your state’s requirements, see our guides on how to form an LLC or how to form a corporation for your state.
Or, for help preparing and filing annual reports, see our guide on the best annual report filing services.