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In this guide, we’ll walk you through the steps to form a C-corporation for your beauty business. We’ll cover how to choose a name for your corporation, register it with the state, and determine the number of shares of stock that you want, create bylaws and hold a meeting of the incorporators. Finally, we’ll show you how to issue stock certificates so that each shareholder has proof of ownership in their part of the business.
The first step to forming your beauty corporation is choosing a name. You will want to choose a name that is easy to remember, not too long and not already taken. Your company’s name should not have any negative connotations either (i.e., “Ugly”).
Articles of incorporation are a document that sets out the fundamental details of your business. They include information such as:
One of the first decisions you’ll make as a business owner is deciding how many shares of stock your beauty corporation will have. The number of shares determines who owns the company, and in turn, how much money each owner gets paid if there’s ever a sale or dividend.
Here are some factors to consider when deciding on the number of shares:
By creating corporate bylaws, you will ensure that all members of your company agree on a set of rules for making decisions. In addition, these documents ensure compliance with state law regarding corporations.
You can use an online service or hire an attorney to help create your corporate bylaws.
The people who form the corporation are called “incorporators.” Usually, this is just another name for your founding shareholders as well. The incorporators meet and decide on the initial corporation structure. You will want to decide what kind of C-corporation you want to form—a regular or close corporation—and whether it will be a single-member or multiple-member LLC.
The directors are responsible for the management of the corporation. They can be removed by shareholders if they do not perform their duties properly. Directors must be natural persons and at least 18 years old.
A stock certificate is an official document that represents the ownership of shares in a company. In this step, we will discuss how to issue a stock certificate for your new beauty brand.
First, you need to make sure that all of the shareholders of your corporation agree on how many shares should be issued and who should own them. If there are multiple shareholders, then each shareholder must sign an agreement stating that they agree with this arrangement before proceeding with issuing any stock certificates (this process is called “certifying” their consent). Once everyone has agreed on these details and signed off on them, it’s time for the issuing process itself!
When you’re ready to expand your beauty business, a corporation may be the right choice. It offers greater legal protection than a sole proprietorship or partnership but still allows you to run it as a small business. And as we saw above, forming one doesn’t have to be difficult! Just remember that if you do decide on this kind of structure, you and your shareholders will be responsible for filing annual reports with the state and paying taxes on profits earned by the company each year.
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