It’s a good idea to incorporate your business to protect your personal assets, and it makes sense to get a professional outfit handle the incorporation process for you. But in your search for an online incorporation service, you may notice that some brands offer an incorporation kit as part of their services. It’s usually an add-on, or a feature in a more expensive incorporation package.
But what exactly is an incorporation kit? How does it help you and your business? Are the benefits of the incorporation kit worth the additional money? This guide will answer all these questions.
What, Exactly, is an Incorporation Kit?
What you first have to understand when you turn your business into a corporation is that you will have rules to follow. One of these rules, as mandated by US law, is that your corporation must maintain thorough records of its activities. These records should be kept within accessible reach so that you can refer to it easily enough.
While you have a lot of leeway on how to create and maintain those records, some incorporation services include the incorporation kit to make it easier for you. The main component is simply a binder, where you put all the crucial documents of your corporation into one place.
But this isn’t just a binder. This is a binder that looks impressive and official, with the name of your corporation embossed on the cover or the spine. Some of the more traditional incorporation kits even include decorative seals, as a homage to the old days when authenticating corporate documents involved using wax seals.
In many cases, you don’t just get a binder with decorative seals. You may also receive templates you can use and customize to create your business documents. These templates help guide you on what kinds of records you have to keep in the binder.
What Records are Included?
Incorporation kits aren’t all the same, though they may have lots of documents in common. At the very least, it should include the articles of incorporation, a copy of the corporate bylaws, and a record of the minutes of the meetings of the board of directors.
Basically, these documents are your evidence for the local governing bodies and the IRS that your corporation is complying with the rules and regulations. So, you may want to consider including the following documents:
- Articles of incorporation
- Copy of the bylaws
- Records from annual shareholder and director meetings
- A list of stock owners, stock dividend information, and stock transactions
- Records of all types of resolutions (hiring, loans, employee benefits)
- Transactions including records of property sales and purchases
- Information about large layoffs, market expansions, and new locations
- Corporate tax records
- Other documents required by your state and local government
You really should keep digital copies in secure locations, whether in a password-protected hard drive or cloud. Keep your records as long as you can. Experts say should keep your tax records for at least 7 years, while you should maintain employee records at least 5 years after an employee has been terminated.
When you dispose of your records, shred the paper copies and wipe the electronic copies thoroughly.
Which Incorporation Services Offer Incorporation Kits?
There are quite a few of them out there, though not all incorporation services bother to offer these kits. Truth be told, there really isn’t a lot of demand for these incorporation kits. But if you want one, you can try these brands:
This is perhaps the most popular incorporation service in the industry, and they offer impressive incorporation kits as an add-on for just $70. It’s also part of the more expensive packages, but those packages are expensive as they start at a price of $329.
Their incorporation kit is available as an add-on for $99, and you get the binder, 20 stock certificates, and a slipcase. It’s already part of the Gold incorporation package ($149), and you get a fancier version (including a die-cast seal) in the Platinum package (299).
This is available as an add-on for $79, and you get the FedEx shipping as well. It includes a 3-ring binder with your corporate name embossed on the spine. You also get plenty more, like 20 stock certificates, sample forms for your bylaws and meeting minutes, a stock ledger, index tabs, a slipcase, and an engraved seal. This is great value for money, as you may not find another outfit that offers this much for just an extra $79.
This incorporation kit is also a feature when you go with either their Entrepreneur incorporation package ($199) or their Complete incorporation package (($279).
What you have to keep in mind is that the law simply requires you to maintain important documents, to keep your corporation in good standing, and to prove that you’re following the rules. There’s really no legal necessity that it should look impressive.
Often, these kits can cost a fair chunk of money. For many small businesses, that money can be put to better use.
On the other hand, an incorporation kit helps you get a good start in creating and keeping those important documents. The fact that you’re using an impressive-looking binder with properly made documents also reminds you of the seriousness of running a corporation. This isn’t just a lark.
So, should you get one? You don’t have to, and you may want to resist the temptation if you’re operating on a very tight budget. You probably have better uses for your money.
But if you can afford it, why not? It’s an affectation that helps remind you that you’re embarking on a serious venture. It’s also practical since it can help guide you on what records to keep. With an incorporation kit, you have something official that keeps you on the proper corporate path!