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The information on this page has been designed to give you insights on things you may need to reflect on before and after you implement your business.
Before you use it, be sure to test them for relevance to your business development needs.
Checklist-For Starting Your Small Business
Forming a new business requires that the potential entrepreneur do some careful planning and take a number of key steps. Here is a simple checklist of some of the important issues you may need to address before you begin to implement your business.
A pre-business plan summary: This is a general overview of your business idea(s) that includes business location, number of employees and to whom your business will market. On a separate sheet of paper summarize your idea in 50 words or less. Be sure to estimate your start-up costs, monthly expenses and cash flow.
1. Choose a name: This is not easy because many names are already taken and some names have trademark issues associated with them. Check out if the name is available from the Secretary of State of the state in which you plan to file the corporation. You many do a Google search and trademark search online to make sure someone is not already using the name.
2. Decide in what state to incorporate: Delaware and Nevada tout their corporation-friendly state laws, but you will most likely decide that the state that you will reside in will be the place to incorporate.
3. Start preparing the incorporation documents: This will usually mean preparing the Certificate of Incorporation, the Bylaws and Resolutions of the Board of Directors, Stockholder Resolutions, the Stock Ledger, Stock Certificates, and more. To incorporate your business go www.jmcworld.com. You can also get help to customize a business start up checklist for your potential company.
4. File the Certificate of Incorporation with the Secretary of State: Where you are planning to implement your business as a corporation, filing of the Certificate of Incorporation (sometimes called the Articles of Incorporation) is required for officially starting your corporation.
5. Determine the right volume or type of capitalization you will need to start the business: You want to make sure that you adequately capitalize your company to ensure its success. Consider the capital needs of the company by developing a relevant business plan with appropriate financial projections based on material and other needs. Design first year budget, commensurate with same.
6. Issue stocks to the shareholders in compliance with securities laws: When you sell stock to shareholders, you must comply with state and federal securities laws or the laws of the country in which you are doing business. An experienced corporate lawyer may be able to help you navigate through the stock issuance process.
7. If you have more than one shareholder, think about whether you should have a Shareholder Agreement, Buy-Sell Agreement or other types of business agreements: These should cover what shareholders are required to do for the business and for rights of first refusal on transfer of their shares.
8. Make sure you have a Corporate Minute Book: Various corporate actions require proper documentation, such as minutes or consents of the Board of Directors and shareholders. You should set up a Corporate Minute Book and keep the records in that book.
9. Elect the Officers and Directors of the Corporation: Depending on your state law, you may need more than one director. Typically, one person can hold multiple officer positions, such as CEO and CFO.
10. Obtain your state and Federal Tax ID number: You will need such IDs for your business. You can find federal ID application form by going to the IRS Web site. Check with your state department of Taxation or other appropriate agency for state ID numbers.
11. Determine if you need any special licenses for your business: Depending on the type of business you are conducting, state, federal or local rules may require your business to get a special business licenses or permits to operate.
12. Set up a corporate bank account: You need to treat your corporation as a separate entity with its own bank accounts and records. Call the bank you intend to use and ask what you need to open the business account in that bank.
13. If you are going to hire employees, make sure that you have all the proper forms and agreements for them: These forms might include an employee "at will" employment letter (saying either the employer or the employee can terminate the relationship at any time), a Confidentiality and Invention Assignment Agreement (ensuring that whatever they develop in connection with their job is owned by the corporation), and an Employment Application (requiring the employee to give you relevant information as a condition to hiring them).
14. If you are conducting business in the US, Decide if you should elect to be an S corporation: S corporations have certain tax advantages, but you have to follow certain rules and file an election to acquire that status with the IRS.
Of course, your particular business may require additional steps to be followed, and consultation with your lawyer and accountant may be appropriate. Good luckJMC
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James Management Consulting, Inc. is a business consulting and accounting firm.
We do NOT provide legal advice. For a list of the business services we offer, CLICK HERE.