To start your own corporation, you must file incorporation papers with the state where your business operates. Starting a corporation will have many legal and tax ramifications for your business. For example, corporations are separate legal entities that may enter into theirs own contracts and have legal process initiated against them. Furthermore, a corporations you start may acquire assets and debts that are separate from your personal assets and debts. Many small business owners incorporate to protect their personal assets in the event that their business is sued.

Step 1.

Choose a name for your corporation that's different from other businesses in the state. The name of your corporation must end with a corporate identifier such as "incorporated," "limited," or "corporation," as indicated on the Citizen Media Law Project website. In addition, your corporation's name must not include words that indicate an affiliation with a bank or government agency. Conduct a business name search using the state's Secretary of State website. In some states, a business name search may be conducted by mail, telephonically, or in person.

Step 2.

Recruit people to serve on your board of directors. The directors of a corporation set company policy, and make major financial decisions for the corporation, according to the Nolo website. Most states allow a single shareholder to act as the corporation's only director. Some states, however, such as Arizona, will require at least three people to act as directors of a corporation, unless there are fewer than three shareholders in the corporation. If there are fewer than three shareholders in your corporation, the number of directors may be equal to the number of participating shareholders.

Step 3.

Obtain articles of incorporation, also known as a certificate of incorporation. Most states will provide prospective corporations with "fill-in the blank" articles of incorporation. Depending on the state, articles of incorporation may be obtained from the Secretary of State's website, by visiting the Secretary of State's office, or by mail request.

Step 4.

Prepare the articles of incorporation. Most states will require your corporation's articles of incorporation to include contact information such as the name and physical address of the business. In addition, most require the name and physical address of your corporation's resident agent, an adult or business that agrees to accept your corporation's legal documents. The articles of incorporation must indicate the number of shares your corporation has the authority to issue. Some states may require additional provisions in your corporation's articles of incorporation such as its business purpose and the names and addresses of the company's directors.

Step 5.

Submit your firm's articles of incorporation to the Secretary of State's office. Depending on your state of incorporation, articles of incorporation may be submitted by fax, mail or in person. In a number of cases, you may submit your corporation's articles of incorporation electronically on the Secretary of State's website. Pay the appropriate filing fee, which may vary from state to state.

Step 6.

Issue stock to initial shareholders at your corporation's first meeting. Your corporation's board of directors must determine the price initial shareholders will pay for shares of your company. According to the Citizen Media Law Project website, initial shareholders of your corporation may offer cash, property or services in exchange for shares of your corporation. Money collected from your initial stock issue will comprise your corporation's initial operating capital.