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If you're planning to incorporate a company in the United States, this checklist will help guide you through the process by outlining the information and documents you will need. Although each state has its own procedures, the basics of incorporating a company are much the same throughout the country.

Information Required Prior to Filing the Incorporation Application

• Reserve the proposed name of the corporation and any additional trade names under which the corporation will be doing business. This may entail additional documentation and filing fees to register those trade names.
• Determine who the directors and corporate officers (or if an LLC, the members and managers) will be.
• Discuss with your business partners (if any) and your legal counsel if any special provisions will be included in the articles or in the company bylaws / operating agreement.
• Ensure that any compliance, licensing or regulatory requirements for the corporation’s business are met.

Documents to be Prepared

• Articles of Incorporation or Organization (depending if a corporation or LLC)
• Certificate of Disclosure
• Bylaws or operating agreement (depending on the type of entity)
• Shareholders Agreement
• Minutes of Organizational Meeting
• Subscription for Shares of Stock
• Application for Employer Identification Number / Federal Tax ID
• Corporate Minute Book
• Stock Transfer Ledger
• Stock Certificates

Once the documents are prepared, you can file them with the Secretary of State. Most states have an online filing option.

Roles to be Filled Before Incorporation

• Accountants
• Legal counsel
• Registered agent
• Bank, trust company, other financial institution(s)
• Investment broker and financial advisors (if required or desired)
• Insurance company (life, office contents, commercial general liability, etc)
• Auditors (if required or desired)

Things to Do Following Incorporation

• Hold an organizational meeting to issue shares, appoint the directors and officers, set the company's fiscal year end, and adopt the bylaws.
• Apply for a federal EIN (employer identification number).

Other Matters to Consider

• Determine whether the corporation needs to obtain a sales tax license.
• Decide whether the corporation qualifies for Sub-chapter “S” status.
• Review the statutes governing corporations to determine what the regular reporting requirements are, and be sure the dates are properly diarized for preparing and filing the appropriate documents.
• Order corporate seal.
• Get information on the “piercing the corporate veil” rules.
• Get information on state, federal and municipal laws, rules and regulations that apply to the corporation’s business (environmental, tax, import/export, etc).
• Learn how to properly dissolve / liquidate a corporation.

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What is a voting trust?

A voting trust is an arrangement under which legal ownership of shares belonging to one or more shareholders are transferred to a trustee, along with the voting rights attached to those shares, usually for a specified period of time. The shareholders retain beneficial ownership of the shares and all other rights and benefits, except for the right to vote the shares. At the end of the trust, the shares are re-transferred back to the beneficiaries (i.e., the shareholders).

To establish a voting trust, the shareholders enter into a trust agreement with the trustee, setting out the provisions of the trust, transferring legal title of their shares to the trustee, and granting the trustee the right to vote the shares. In some voting trusts, the trustee may also be granted additional powers in order to accomplish the purposes of the trust (such as the authority to sell or redeem the shares).

What are the benefits of a voting trust?

A voting trust arrangement can offer a number of benefits to a company's shareholders. By consolidating the voting power of their shares, they can collectively hold a sufficient percentage of the company's voting shares that they would not have individually, which - as a voting bloc - would give them the power to force the calling of meetings, elect specific directors, and generally exert or safeguard control of the company.

Locking shares up in a voting trust can be used as a means to facilitate a corporate reorganization - or to avoid a hostile takeover of the company - by aggregating a certain percentage of shares into the trust, consolidating their voting power, and protecting them from being acquired in connection with a potential takeover bid.

A voting trust can also operate as a short-term proxy solution for a period of time during which the shareholders will be unavailable to attend and vote at meetings, or as a convenience. By appointing a trustee to vote their shares, the shareholders free themselves from the necessity of attending meetings, voting on key issues, and dealing with other responsibilities associated with share ownership.

A discretionary voting trust (also known as a "blind trust") can be used as a mechanism to resolve conflict of interest situations. In a blind trust, the trustee has full discretion over the trust assets (i.e., the shares) and votes the shares at arm's length from the beneficiaries of the trust (i.e., the shareholders).

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It all started so well. You went into business with a friend or colleague, and for awhile everything was great. But as time went on you realized it wasn't working. Now you want to dissolve the partnership but you're worried it will ruin your friendship. You need to find a way out of the business relationship that doesn't leave you hating each other at the end of the process.

Sounds a lot like ending a marriage, doesn't it? And the fallout of terminating the relationship can be just as acrimonious as a failed marriage. But there are steps you can take to make the transition less painful for both of you.

1. Put everything in writing.

Hopefully you had the foresight to draw up a Partnership Agreement at the outset. A well written Partnership Agreement will cover how the parties are to proceed if the relationship is terminated, how profits and losses will be allocated and assets distributed, and an option for one partner to carry on the business if the other wants to withdraw. But if you didn't formalize the partnership in writing at startup, you can still formalize the breakup with a Partnership Dissolution Agreement.

2. Play nice.

It's never wise in business to burn your bridges, so keep a smile on your face, mind your manners, and treat your soon-to-be-ex-partner as you would like to be treated. The more civil you can be during your break-up negotiations, the smoother the transition will be. And it will make your mother proud.

3. Seek professional advice and input.

Your lawyer and your accountant should both be involved in the process. After all, that's why you hired them - to give you advice. They're the experts when it comes to the tax and legal implications of dissolving a partnership. They have no emotional attachment to the business, which is a distinct advantage because all breakups - professional as well as personal - are fraught with emotion for the parties involved. You should also hold a formal partners meeting to discuss the dissolution and have an outside third party present to take notes of the proceedings. The presence of outsiders often helps to allow cooler heads to prevail.

4. Be reasonable.

Don't be greedy and don't make unreasonable demands. Try to come up with an exit plan that works for everyone. Put the emotions aside (see points #2 and #3 above) and negotiate in good faith.

5. Keep the lines of communication open.

You would never have gone into partnership with these people unless you felt that your respective skills and talents meshed well. As mentioned above, never burn bridges if you can avoid it. The day may come when you need to call on the skills of an ex-partner for a project, so staying on good terms is essential. So long as you can keep talking, you can work your way through the bad feelings and get to a better place where you both feel more comfortable.

6. End it quickly.

Forget the long drawn-out drama and just cut to the chase as quickly as possible. That way you can all get on with your respective careers in a more positive and productive environment.

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Have you reached a point with your business where it's no longer desirable or feasible to continue operations? So many businesses, large and small, have faced that decision during the COVID-19 pandemic. It's very difficult to consider walking away from something that you have built with your own equity, sweat, love and passion. But if you have reached that crossroads and there is no hope of selling it and no family members or employees willing to take it over, then your only other course of action may be to shut it down, liquidate the assets, and pay your creditors.

The advantages of joint venturing

Joint ventures are much more common in today's business world as companies strive to gain access to new world markets and improve their profit margins in the face of increasing costs and the need to comply with rapidly changing laws and regulations.

Joint ventures, also referred to as "business alliances", "strategic alliances" or "corporate partnering", offer an attractive alternative to the traditional method of doing business, and there are numerous advantages to co-venturing. For instance:

• A successful joint venture can offer a company access to much broader markets, distribution networks, specialized technology and personnel, while at the same time sharing the costs and the risks with the other parties to the venture.
• Projects that are too large for one company to undertake can be taken on by several firms acting together.
• A group of smaller competitors can band together in a joint venture to keep afloat in a market that is dominated by one giant company who owns most of the market share.
• A foreign company might form a joint venture with an existing company in a market that the foreign company wants to enter, such as China. The foreign entity typically provides new technologies, processes and products to the joint venture, while the Chinese company would provide an existing business and customer base, experience operating in the local industry climate, a knowledge of local markets, and compliance with applicable governmental requirements.

What are the main aspects of a joint venture?

A joint venture is basically a short-term partnering arrangement in which the parties involved jointly undertake a project for mutual profit. Similar to a partnership, a joint venture can involve any type of business transaction or project, and the parties may be individuals, companies or other types of entities or organizations.

The co-venturers share the costs and the risks, as well as any gains and benefits, and each of them contribute money, property, effort and/or know-how to the joint venture. The participants in a joint venture each retain ownership of their individual property, which is returned to them at the conclusion of the venture.

The parties may decide to enter into a contractual arrangement to cooperate with each other (a contractual joint venture), or they may decide that it's more advantageous to incorporate a separate company to carry out the project (an incorporated joint venture). The life span of a joint venture is typically the life of the project for which it was created, although the co-venturers may determine that the joint venture should carry on for an additional period of time, as required by the nature of the business / project.

The laws governing joint ventures differ from country to country. For example, in the U.S. joint ventures are governed by state partnership and commercial transactions laws. In Canada, there are no specific laws governing joint ventures, and the joint ventures are governed by the written contract between the parties. Therefore having a written Joint Venture Agreement is of paramount importance. If the joint venture is incorporated, with the co-venturers as shareholders, the legal status of the venture is governed by the law governing corporations in the jurisdiction in which it was incorporated. It is important to note there have been court decisions where shareholders in a corporate joint venture have been deemed partners.

Managing risk in a joint venture

Like any other business opportunity, joint ventures have their own inherent risks. This is particularly true when you're expanding into a new market or into another part of the world. Before you decide to venture into a foreign market be sure that everyone on your team is well aware of the local laws and the cultural differences, customs, holidays, and social taboos. Be clear on what the purpose of the joint venture is and how your business would contribute to and benefit from the venture. What would be required of you, and what would your expectations be? What contributions would you be expected to make in terms of money, property, resources, and expertise?

Foreign joint ventures are subject to international trade laws and to local laws governing commercial transactions, labour, and consumer rights. Tax laws also differ from country to country, and you should be fully aware of what these laws are in the countries you're moving into. It's also critical to know whether there are restrictions on the amount of investment or capital distribution that foreign entities are allowed to make. Can you freely move money into and out of the business, or are there limits imposed by law? Many problems can be avoided if everyone involved is very clear on the joint venture's goals and objectives and has a good understanding of how those goals are to be accomplished. A well-researched business plan for the venture must be developed with a full analysis of the aims and objectives. Everyone involved should be well acquainted with the business plan and how it will be implemented. All of the participants must also agree on how the venture will be managed and what each party's role will be in that regard. These points should be clearly spelled out in the Joint Venture Agreement.

How to choose the right co-venturers

Choosing the right partner in a joint venture is essential to your success. You want a partner that can supply resources, property, assets, and/or know-how that complement your business. As with any other business relationship, you will want to check out all potential partners before deciding to embark on a joint venture. Do thorough due diligence, and be sure to search online as well - on the principals as well as the company (if applicable). A Google search can bring up a wealth of information, comments, feedback, personal experiences - favourable and unfavourable - that can help you form a fairly accurate overall picture of the other partners.

Putting together a Joint Venture Agreement

Once you have prepared a draft of your agreement, review it with your co-venturer(s) and legal counsel prior to signing it. At a minimum the joint venture agreement should include the following:

• The purpose, organization and structure of the joint venture.
• How the venture is to be financed.
• Each party's initial and ongoing contributions to the venture (whether capital, skills, equipment, property, know-how, expertise, etc.). Each co-venturer's contribution to the project should be of equal value.
• A procedure for parties to make future contributions.
• The participant's right to participate in the control and management of the joint venture.
• Each venturer's responsibilities with respect to handling day-to-day operations.
• Interest of the co-venturers in the products / proceeds of the venture.
• How profits and losses will be allocated.
• A procedure for a co-venture to sell or transfer its interest to another party, as well as a process for admitting new members.
• A procedure for holding meetings and a method of voting at those meetings.
• A marketing plan.
• Restrictions (if any) on venturers' activities external to the venture.
• What events are triggered by a default by a participant.
• Proprietary rights in property and assets.
• Liability and indemnity of co-venturers.
• How and under what circumstances the venture will be terminated.

Image by Gerd Altmann from Pixabay

Q. What is a partnership?

A. A partnership is an unincorporated business that is owned and operated jointly by two or more parties. It is typically an ongoing long-term business operation, the end goal of which is to create profit for the partners.

Q. What's the difference between a partnership and an incorporated entity, such as a corporation or limited liability company?

A. The biggest difference is that a corporation has a legal existence separate from its owners, with the same legal rights and obligations as a natural person. A corporation can hold property and assets in its own name, it can sue and be sued, and it must file income tax returns. A partnership does not have this type of separate and distinct existence.

Unlike a corporation, a partnership is not required by law to hold meetings, elect officers, or maintain a corporate minute book. Usually the partners will all participate in the management of the partnership and will share pro rata (according to their individual contributions) in the profits and losses, and assume equal responsibility for the partnership's liabilities.

Shareholders of corporations and LLCs are not personally liable for the obligations of the corporation / company. By contrast, partners in a general partnership are all personally liable for its obligations and can be sued by the partnership's creditors.

Q. What are the legal requirements for creating a partnership?

A. If you go into business with someone else, you have automatically formed a partnership and are not required to file anything to "create" the partnership in the eyes of the law. That having been said, depending on where the business is located and what type of partnership you are forming (such as a limited partnership), there may be some forms that are required by local government authorities for business and/or tax purposes.

Do your research to find out if you're required to submit any documentation to satisfy those requirements in your state, province or territory. It is beneficial for all parties that the details of how the partnership will be run are clearly set out in a written partnership agreement. If you don't have a written agreement, the partnership laws of your state, province or territory will govern the partnership. A written partnership agreement will remove any ambiguity as to the parties' rights and their responsibilities to each other and to the partnership, and can eliminate many sources of conflict before they arise.

Q. How can a partner leave the partnership?

A. This is another reason to have a formal agreement in place. All partners can then agree what will happen to the partnership if somebody wants to leave the partnership for any reason - whether by choice (retirement, change of circumstances, etc) or by necessity (illness, incapacity, bankruptcy, death). Every Partnership Agreement should contain buy-sell provisions to deal with these situations, in order to avoid loss of income, litigation, tax implications, and other negative consequences.

Q. How is partnership income taxed?

A. As discussed above, a partnership is not considered a separate entity in the way that a corporation is, so the partnership does not pay income taxes on its own behalf. Partnership profits and losses pass through to the partners, who must claim them on their own income tax returns. The partners then pay taxes on their share of profits or deduct their share of partnership losses, as appropriate. Nevertheless, partnerships are required to file certain forms with the taxing authority - this is true in both the United States and Canada.

Q. What is the difference between a general partnership and a limited partnership?

A. A general partnership is a partnership in which all the partners participate in managing the business. In a limited partnership, one or more general partners are responsible for running the business while the limited partners (of whom there may be many) are responsible for capitalizing the business. The limited partners have very little control over the day-to-day operations, but in return for giving up that control their liability for partnership debts and obligations is limited to the extent of their investment. Securities laws may apply to the sale or transfer of limited partnership interests. If you're considering setting up a limited partnership to attract investment capital, you should consult a lawyer.

Q. What is the liability of the partners in a general partnership?

A. Because a partnership has no legal status as a separate entity, the partners are personally liable for all of the partnership debts and obligations. Partners in a general partnership have the same degree of liability as the owner of a sole proprietorship. If one of the partners creates an obligation for the partnership, all of the partners are bound by it. Limiting the liability exposure of the partners can be encompassed in a written agreement, by stipulating that all or a majority of the partners must consent to enter into certain types of obligations or to incur debts over a certain limit on behalf of the partnership.

Limited partnerships reduce the liability of the limited partners to the extent of their original investment. The general partner manages the partnership and accepts full liability for the partnership obligations, and the limited partners give up any management authority in return for the protection from liability.

Q. What provisions should a Partnership Agreement include?

A. A written Partnership Agreement should contain the following:

• The identity of each partner.
• The name of the partnership and the type of business it will operate.
• The amount / extent of each partner's investment.
• A procedure for allocating profits and losses.
• The duties of each partner with respect to the partnership business.
• The partners' privileges for drawing on the partnership accounts (if applicable).
• Restrictions on an individual partner's ability to act on behalf of the partnership (and therefore the other partners).
• What types of events will dissolve the partnership (death or incapacity of a partner, for example).
• Procedure for terminating the partnership (for example, either partner may terminate the agreement and dissolve the partnership upon _____ days written notice to the other partner).
• Procedure for removing a partner.
• Procedure for dealing with the partnership interest of a deceased or departing partner.
• Mechanism for dispute resolution.

Image by Gerd Altmann from Pixabay

Have you considered moving your business online, but are not really sure what that will entail? You're not alone. Businesses large and small have expanded their reach by adding an online presence to their brick-and-mortar environment.

The internet offers a great opportunity for all small businesses, and along with that power comes unique challenges. Sure, every business owner faces issues daily, however, online entrepreneurs have some especially challenging queries which require specific, no-nonsense answers. These answers are often hard to find in the highly technical or overly promotional web sources.

As a small business consultant and online business owner myself, here are the answers that I share with my clients. Be armed with knowledge to successfully face these instances with educated confidence and go forth and prosper in your online business.

Q. Do I have to collect sales tax on online sales?

A. Whether or not to collect taxes is one of the most confusing aspects of running an online store. Knowing how much to charge and what laws and regulations apply to your location is complex.

Currently, internet sales taxes are governed and collected by individual state governments. Because of the non-physical nature of internet businesses and the varying state laws, there is a movement to pass a federal law regarding internet taxes called the Marketplace Fairness Act.

Sales tax is due on all internet purchases in 45 states, and you are required to collect sales tax on your online transactions. Learn about your state's specific laws in this internet sales tax guide.

Q. How will Europe's new privacy law affect my website?

A. On May 25, 2018, the EU enacted the General Data Protection Regulation (GDPR), which requires all businesses and organizations to inform consumers of how their personal information is being collected and used online. If your website collects any private data from a resident of the European Union, you must provide your site users with details as to how that information will be collected and used and give site visitors an opportunity to agree to the use, collection and storage of such information.

In order to make sure your site is compliant, you will need to adjust your privacy policy, get users' consent to use cookies, and limit the data you collect via your signup and other forms.

Q. What is an appropriate budget for online advertising?

A. Many business owners wonder how much they should set aside for online advertising because the model is very different from the print ads that they are accustomed to purchasing. And there are so many different online ad platforms, such as Google Adwords, Google Shopping, Facebook Ads, Instagram and LinkedIn, among others, that it can quickly become overwhelming.

Based on industry standards here is a good formula you can use as a starting point for your online advertising budget:

• Spend 3% of your annual revenue on online paid search (Google, Bing, Yelp, etc.) and digital marketing activities, and
• Spend 1% on social media advertising and marketing (Facebook, Instagram, LinkedIn, etc.)

This is calculated using the standard rule of 10% of annual revenue as advertising budget and then proportioning an amount to online ads.

Q. What kinds of tasks should I outsource?

A. Small businesses, and especially startups, can greatly benefit from today's gig-based, internet-fueled economy. Digital workers are ready and able to provide expert work at affordable prices.

The easiest and most beneficial items to outsource are bookkeeping, payroll, scheduling and logo branding design, which I did recently with good results.

Only use reputable services to ensure good quality and follow-through. Look for firms that have developed good workflow processes, excellent online workspaces and that have full customer support teams. Research potential service providers by looking for customer reviews on Google+, Facebook, Twitter and other social media streams. Check with the Better Business Bureau to see if there are any complaints filed against them.

Q. Is there an affordable way to improve my search engine rankings?

A. Many SEO (search engine optimization) tactics - those site changes that get you listed higher on Google's search results pages, are easier to implement yourself than you might think.

Especially vital for local businesses is to make sure your NAP (name, address and phone number) are correct and consistent across the web, because if Google gets confused it will downgrade your site and you will lose visibility and a corresponding drop in traffic.

Another way to improve your rankings is to focus each page of your site on a specific keyword phrase so that the search engines will be clear of your page content.

Q. Are there other cost-effective ways to promote my company online successfully?

A. The internet is a great, and often free, place to promote every business type.

Microsoft founder Bill Gates once said that "Content is king". This statement in a 1996 essay he wrote about the future of the internet means that supplying information - whether to inform or entertain - is the best way to promote your brand, products and company online.

Get started right away by creating a company blog and posting top quality content which is of interest to your target customer. Post new articles to your blog on a regular basis. In addition to increasing your site traffic, it signals your authority to search engines which will then reward you with higher page rankings over time.

Once your blog is published you can distribute and promote this material across the web and on free social media sites such as Google+, Facebook, Pinterest, Twitter and other sites.

_{Image by Mediamodifier from Pixabay}

About the Author:

Marsha Kelly sold her first business for more than a million dollars. She has shared hard-won experiences as a successful serial entrepreneur on her Best4Businesses blog, where she also regularly posts business tips, ideas, and suggestions as well as product reviews for business readers. As a serial entrepreneur who has done “time” in corporate America, Marsha has learned what products and services work well in business today. You can learn from her experiences to build your business.

Before deciding whether or not to incorporate your company under the Canada Business Corporations Act or any of its provincial counterparts, there are a number of important considerations which must be taken into account.

A list of the 5 principal steps you need to take in order to set up a limited liability company in the United States.

Every business partnership, no matter how good the relationship, has the potential to end in dispute. So long as the parties agree on significant matters, minor disagreements generally resolve themselves. The best and most proactive way to attempt to resolve or avoid potential conflicts and to minimize the costs involved in conflict resolution is to have a Shareholder Agreement in place to deal with significant business issues before they arise.