Private corporations are companies that are not publicly traded on a stock exchange and have been incorporated. These companies are often owned by a small group of individuals or other companies. Some many have been funded from private savings, from angel investors, venture capitalists, banks or other private funding sources. Starting a private corporation involves obtaining funding, establishing the legal foundation of the business and setting up all necessary businesses equipment and processes needed to create a profit.
Create a business plan for your private corporation. Include information on your products, services, a marketing plan, start-up costs and proposed initial financial reports. The goal with your business plan is to create a foundational blueprint for your business. A business plan is also a useful marketing document you can use to obtain funding.
Find business funding and create a pre-incorporation agreement between the business founders and initial investors. This agreement should address ownership, authority and leadership of the private company. Assign a total number of corporate stocks, list shareholders and assign stock ownership as appropriate.
Incorporate your business and register your business name. Businesses can be incorporated in the state where business will be conducted, or in another state with more preferable business laws, such as Delaware. Check with trademark registrars at the federal and state levels for the business name you prefer to ensure availability. Fill out all required documentation and file articles of incorporation with the secretary of state. You will be required to submit a filing fee along with your documents.
Establish your record keeping system. This system should maintain all financial transactions and business information needed to report and control your business. At a minimum, you will need to record corporate decisions such as large purchases, business loans and leadership appointments.
Purchase supplies and equipment. Outfit your business with any products, machines and electronic equipment you need to run your business. Consider starting with the bare minimum needed to effectively run your new private company if funds are limited.
Start your business. Create your products, hire employees and sell your services. Perform all business functions needed to turn a profit and grow your private company.
Hold an annual meeting. File the meeting notes for an annual meeting with the state where the business is incorporated. Meetings can be conducted informally through written agreements, or they can be conducted through an in-person meeting with the full board of directors.
Consult with a business adviser, lawyer or tax accountant to help establish private corporations with a large number of shareholders.
Avoid distributing all shares of your company to allow for future funding options.
- Consult with a business adviser, lawyer or tax accountant to help establish private corporations with a large number of shareholders.
- Avoid distributing all shares of your company to allow for future funding options.