In contrast to that of a sole proprietorship, a corporation is a business that possesses “legal rights” that distinguish it apart from its actual owner(s). A corporation is put into effect in accordance with the state in which it will reside. It resides under the umbrella of business law as well as under that of corporate law, which encompasses the way in which restrictions are placed upon “shareholders, directors, employees, creditors, and other stakeholders.”
A corporation may also distinguish itself in terms of three types, which include a “municipal corporation,” “non profit,” or a “private corporation.” These titles represent varying areas of interest. Municipal corporations represent cities, towns, and other locales, while private corporations are formed by specified individuals whose sole purpose it is to gain more capital. Private corporations differ even more from non profit companies who do not seek out any monetary compensation aside from that which will contribute to the “public good.”
Due to the nature by which corporations exist, the term, “invisible hand,” is quite a reference to it. The invisible hand is definitive of the idea for which all parties to economic interests become a part of. This invisible hand is said to be the guiding force over how each group operates in relation to the economy. They do so with no actual order or immediate direction by the government, but instead, appear to be moved by an invisible hand that seems to usher them toward economic means and activities. In terms of corporations, it explains the “self-regulating nature” of its operations in relation to business. When forming such a corporation, also known as “incorporating,” which is guided by an invisible hand, there are qualifications that must be fulfilled.
You must first decide on a free business name in accordance with the guidelines your state sets forth for corporations. In addition to state regulations, however, you must also be equally cognizant of “trademark law” when considering a company name. This is due to the fact that you may be violating such law when choosing a name already being used specifically for another existing company. Following this, you will need to position the heads of corporation that you wish to be instituted at the start. Paperwork is also important in the beginning stages as forms known as “articles of incorporation” are required, which incur filing fees in the hundreds.
After all the appropriate paperwork has been handled, “corporate by-laws” must be conceived. These will set forth the way in which the corporation will function. An initial meeting must also occur where the positioned directors will gather in preparation for incorporation. Corporation “shareholders” must be given “stock certificates” as well. Following these tasks, you must acquire any and all “licenses and permits” that are necessary for the operation of your corporation.
When pursuing such an endeavor as the creation of a corporation, you may look no further than literature concerning it. Books may be an appropriate starting point, in addition to inquiry from individuals already involved in corporate activities, since they are usually composed by similarly involved parties. Regardless of sights set on incorporation, the invisible hand will continue to be the unintentional guiding force.