Why form a Kentucky Corporation?
When you create a Kentucky Corporation, you are in essence creating a separation from the corporation and the individual. In a sole proprietorship, this separation does not exist. So the assets of both the sole proprietorship and the individual are vulnerable to a lawsuit. This is not the case of a Corporation. A corporation provides limited liability for your personal assets so that the debts and obligations of the corporation are not transferred to the share holder, owner etc... Therefore, forming a corporation may be the smartest thing to do for a growing company.
Forming a Kentucky Corporation is challenging when you are unsure of what the procedures are. You may have many questions and it may take hours of reading to know if you're doing the filing right.
Helpful suggestions in naming your Corporation
A Kentucky corporation name must be distinguishable upon the Secretary of State. Simply put, this means that names that sound similar but have a different spelling or addition of a word will be deemed distinguishable. An example of a name sounding similar and spelled differently is “dogz” vs. “dogs”. The name of the corporation however must end in “corporation”, “incorporated”, “company”, “limited”, or its abbreviation. Also the name of the corporation cannot contain words or language stating or implying that the corporation is organized for a purpose other than that permitted by Kentucky statutes or its articles of incorporation.
What is involved in forming a Corporation?
There are steps that should be taken in forming a corporation. When you begin, you need to know whether a corporation is the right tool for what your business requires. Does a corporation work for you or will you be better off with a LLC. Also, choosing the state in which to file is just as an important factor in choosing your business needs. Once you know what and where to file, the next step is generating articles.
Articles of Incorporation are documents that used by the Secretary of State to initiate the formation of a business corporation. There are certain provisions in the Articles that are required to be listed such as the name of the Corporation, address, directors and registered agent etc. Once these documents are prepared, they are submitted to the Secretary of States office.
The Secretary of State will then approve the documents and then you are on your way to growing your corporation. There are annual filings that are required to maintain the corporation's good standing.
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