5 Steps Involved in Incorporation of Company
Incorporation of Company is the process involved in forming a corporate entity or a company. It is the legal entity that separates the company, its income, and assets from that of the owners. Incorporation of a company has several benefits to the investors or owners and having knowledge of the steps to follow when considering incorporation of company can be of great help.
All across the world, corporations are the major entities used for operating businesses and depending on the location. The process of incorporation of company tends to differ from one country to another.
Regardless of the steps that are shared here, there might arise some differences based on the jurisdiction in which you plan to incorporate the company. However, the majority of the elements are common.
Read on below for the steps involved in incorporation of company:
Ascertaining Name Availability
The first step when considering incorporation of company is to choose a name for the company, then ascertain its availability. A company will be identified with its registered name and that name will be featured in the Memorandum of Association of the company. Unlike a sole proprietorship, a company name has to end with the word, ‘limited.’ In order to check for availability of the name, the professional firm engaged with the registration process can make an application with the choice of names. At least three names can be given as choices to be checked for availability.
Preparation of Articles and Memorandum of Association
The company’s Memorandum of Association is more like its constitution. It details the type of business that the company intends to do, company objectives, and any other plans that the business intends to take. It also presents other details such as the clauses; the name clause, registered office clause, objects clause, liability clause, and capital clause. The reason why you should engage a professional firm for incorporation of company tasks is due to the level of accuracy that it requires.
The Articles of Association presents the internal rules that the company is expected to abide by.
Printing, Signing, Stamping, and vetting of both articles and memorandum of association
The third step entails printing, signing, and stamping of both the Articles and Memorandum of Association. The Registrar of Companies can provide the necessary forms that need to be completed and filled during incorporation of the company. The duly completed and signed Articles and Memorandum of Association forms can then be presented to the Registrar of Companies for vetting and approval.
Power of Attorney
For an offshore company, the directors can then fulfill the legal process concerning documentation formalities that authorize the inclusion of a local director who can act on behalf of the company. This is vital during incorporation process especially if it’s an offshore company. The attorney will have the authority to make any changes to other documents that are filed with the registrar but with full knowledge of the directors.
Payment of Registration Fees
A prescribed fee should then be paid to the Registrar of Companies during the course of incorporation of company. The fee is normally based on the nominal capital of a company which also has a share capital.