If there are multiple shareholders, then you may need to create a shareholder agreement.  This will explain what happens if the parties disagree and should be drawn up by an attorney to ensure all parties are equally protected.

A shareholder agreement will discuss the buy-out process, arbitration, majority voting requirements, or veto by minority shareholders, among other things.  While it may seem expensive to pay a lawyer to draw up the paperwork, consider the cost of enduring lengthy litigation when one party sues the other.

You’ll also want to have your bylaws constructed, which are the rules for your organization that are required by law.  You must have an annual meeting to discuss the corporation, and amend the bylaws if necessary.  At the first meeting, the bylaws must be adopted by the board of directors.

In chapter five, we’ll cover exactly how to maintain the proper records and how to conduct your annual meetings to ensure maximum compliance for your corporation.

Another paperwork task you can’t overlook is the acquisition of the right tax forms.  Before you even open a business bank account, you’ll need to obtain your EIN – the Employer Identification Number. 

The EIN is similar to a social security number, only it’s for a corporation, instead of a person.  You can obtain your company’s EIN by filing an Application for Employer Identification Number (IRS Form SS-4). 

If you need it quickly, then you can phone in your request – but make sure you have the completed form in front of you, which they may ask you to fax to them.  Otherwise, mailing it in can take weeks to get the number. 

The IRS will put your company on the list to be mailed your necessary tax forms for the corporation, but if for some reason, you don’t receive these, call your local IRS office and request them.  The Circular E will explain the taxes for your corporation.

If you’re launching an S-Corporation, then you’ll also need to file an Election by a Small Business Corporation (IRS Form 2553).  This must be done within 75 days of incorporating.

You’ll also need to find out if your business requires other tax forms, such as those to collect sales tax or to pay corporate income tax.  State laws differ on these issues.  Before incorporating, contact your state’s taxing authority to find out what tax laws you’ll be required to follow.