Incorporating a business in Missouri doesn’t have to be a headache for aspiring entrepreneurs. Indeed, new business owners have enough on their plate without having to worry about the ins and outs of filing articles of incorporation correctly. The good news is, we’re here to help.
There are a number of reasons why it makes sense to incorporate your business. Fortunately, regardless of why you’ve decided to do so, the filing procedure is still the same.
Below, we’ll explain everything prospective business owners need to know about filing articles of incorporation in the state of Missouri. (Just because you’re familiar with the filing process in another state, doesn’t mean you should attempt to file on your own in Missouri. Each state has unique stipulations, and making a mistake on a legal form is something all business owners should seek to avoid.) From registering a name, to designating stock structure and everything in between, you can consider this your ultimate guide to incorporation in the Show-Me State:
Articles of Incorporation Stipulations and Requirements
The first thing a new business needs is a name. However, selecting a legal company name in Missouri may be more complicated than one would first imagine.
Unsurprisingly, any new company name must be distinct and distinguishable from any other legal entity’s name and must not infringe upon Missouri laws or the laws of another state. However, there’s a big difference between a fictitious name (trade name) and designating a legal name for your business with a trademark, for instance.
A fictitious name refers to a name under which a person or entity conducts business. There is no limit to the number of different entities that can use the same fictitious name. As such, it’s possible for two different companies to do business under the name “Joe’s Auto Shop.” It’s important to remember, though, that your business’s legal name must not infringe on any existing legal names or laws. (So you can’t name your business “Starbucks” because it breaks copyright and trademark laws.)
Lastly, individuals who are registering a foreign corporation (i.e. a corporation that was formed in any state other than Missouri) may not use their corporation’s name if that same name is already being used by an existing company in Missouri. Rather, they’ll have to adopt an assumed name to conduct business in Missouri.
Though this may seem more confusing than it needs to be, you can check for the availability of a corporate name by clicking here. In addition, you may also reserve a name for up to 60 days (with the possibility of two further 60-day extensions for a grand total of 180 days) for a fee between $25-$30.
Incorporators, Directors, & Officers
In order to complete the articles of incorporation form, one must name all incorporators, the number of directors, and certain designated officers. An incorporator is simply a person who organizes the corporation and files the articles of incorporation. More often than not, this person –– or these people –– is considered the “founder” of the company, in layman’s terms.
In addition to providing the names and addresses of all incorporators, the form will require you to add the names of the directors. A director –– as opposed to an incorporator –– sits on the corporation’s board and acts on behalf of the shareholders. Similarly, incorporators must list officers who are individuals appointed for high-ranking positions by the directors.
There are a few other things worth noting regarding incorporators, directors, and officers. First, incorporators may also be directors or officers. Second, the state of Missouri permits single-shareholder corporations; this means that a sole person can found a company and act as a defacto board of directors would. And lastly, unlike other states, Missouri requires that at least one of the incorporators be a “natural person.” Some states permit existing corporations to act as the sole incorporator of a new business, however, in Missouri at least one of the incorporators must be a person above the age of 18.
Registered Agent and Registered Office
The registered agent of a corporation is the person who receives any legal documents relating to the business. So, for instance, if a former employee decides to sue a corporation, the court will notify the registered agent. The registered agent must have an office (the registered office) located in the state of Missouri.
While an incorporator may take on the role of registered agent, most businesses appoint a lawyer to act as their registered agent. (This is highly recommended. Unless you have extensive legal knowledge, it’s a wise idea to select an attorney as your registered agent.)
You may change the registered agent after incorporation for a $10 fee.
Company Stock Structure
It’s easy to overlook company stock structure when you first decide to incorporate your business. However, the way you decide to organize your stock structure among your partners could affect the nature of your business for years to come. There are a number of factors to consider in this matter, but for our purposes here, we’ll focus on what you need to fill out on the articles of incorporation form in regard to company stock structure.
First, you’ll be asked to determine the distribution of authorized shares. This is the total number of shares the corporation can offer. Note here that this number will also directly influence how much it costs to incorporate your business in Missouri. (More on that later.)
From there, the form requires incorporators to designate stock as either common or preferred. If common, you may proceed to fill out the rest of the form. If, however, you wish to create custom stock structure with different payouts, voting rights, etc. you must state here how preferred stocks will differ from common stock, as well as how many you wish to authorize.
Finally, you should indicate what par value your stocks will carry –– if any.
Company Purpose Statement
A company purpose statement is more or less a legal requirement. It is not synonymous with a mission statement.
The best way to fill out this section is to employ an extremely general statement that covers all potential business ventures you might pursue.
The Missouri Secretary of State website proffers this example: “The corporation is formed to conduct and transact all lawful business activities allowed under the laws of the State of Missouri.”
You may also consider combining a general statement with a more specific one. However, it’s not recommended to write a specific company purpose. If, for example, you designated a company’s purpose to solely sell a single product, you could run into some legal trouble if you decided to expand your operation into other industries.
Length of Corporation
Missouri law requires incorporators to state how long their corporation will last. The easiest answer is to select “in perpetuity” (i.e. forever). The only reason to select a date is if you’re certain you want a company to be dissolved at a certain time, which it will be if you designate it as such.
Articles of Incorporation Fees
As mentioned above, the nature of your corporation’s stock structure will determine the fees you have to pay to incorporate. For every 10,000 shares above 30,000, new corporations will have to pay an extra $5 fee added to the base fee of $50. Other small tech fees also exist that will slightly change the exact sum of your fee.
For example: incorporating a company with under 30,000 shares will cost $58 ($50 base fee plus tech and processing charges). Incorporating a company with between 30,000 and 40,000 shares will cost $63. And incorporating a company with between 40,000 and 50,000 shares will cost $68. And so on.
In regard to forming an LLC as opposed to incorporating, that fee will cost approximately $50. For a more in-depth look at creating an LLC, click here.
Benefits of Filing Articles of Incorporation
There are a plethora of benefits and advantages associated with filing articles of incorporation. To begin with, incorporating allows business owners to separate their personal assets from their business debts. This also serves as a critical bit of legal protection. That’s why lawsuits, like wrongful termination, are filed instead against a given company rather than an individual (or set of individuals).
In addition, incorporation helps businesses save money on taxes and deduct health insurance premiums. Plus, incorporated entities typically find it easier to raise capital, apply successfully for loans, and gain traction in their given industry.
Incorporation is a logical step on the path toward business success. Still, it’s unwise to attempt to fill out important legal documents without the assistance of a lawyer. If you’re ready to move forward with your business plan, then contact the team at Sivia Law today. We have years of experience and are ready to assist you with all of your business-law needs. Call us for more information at 618-702-1015, or get started now with one of our online packages!