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Dear Dinesh:
Many entrepreneurs begin with a sole proprietorship, which is to say that
they begin by doing business as the single owner of an unincorporated
company. As such, a sole proprietorship is not a registered legal entity
that is separate from its owner and therefore cannot technically be
"changed" or converted to a corporation (or a limited liability company, for
that matter).
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Instead the sole proprietorship would cease to exist, and you would form
a new corporation to conduct business. Corporations are formed at the state
level by filing the Articles of Incorporation with your Secretary of State.
The Articles of Incorporation (also referred to in some states as the
"Certificate of Incorporation") is the document that serves as the charter
of the corporation. It includes such details as the corporation's name,
purpose of the corporation and stock structure, as well as other information
as required by the laws of the state of incorporation. You may prepare and
file the Articles of Incorporation yourself, or you may hire an attorney or
incorporation services company to do this for you.
Most states require corporations to designate a registered agent to
receive service of process and legal notices on behalf of the corporation.
While the majority of states require the registered agent to be physically
located in the state of incorporation, West Virginia does not. The
registered agent (or "agent of process") of a West Virginia corporation may
be located inside or outside West Virginia and may be an officer, director,
employee, other individual or corporate service company.
Information on incorporating in West Virginia can be found at the West
Virginia Secretary of State's official Web site at
http://www.wvsos.com/
You will probably want to draft a new contract for any formal business
agreement entered into by the corporation. Consult an attorney if you have
questions regarding the validity or enforceability of any existing
contracts.
Good luck with your new business!
Chrissie Mould
About the PowerHomeBiz.com Guide:
 Chrissie
Mould has over a decade of experience in business administration and
startup business consulting. She has helped launch companies in multiple
industries and has managed corporate administration and governance for
public and private companies. She is an incorporation specialist with
MyNewVenture.com LLC. The company provides low-cost incorporation services
to entrepreneurs and small businesses. Visit
www.MyNewVenture.com to form
a corporation or LLC.
The opinions expressed in this column are those of the
author, not of PowerHomeBiz.com. Users should not treat the Guide's response as
legal, accounting, or professional advice as all answers are intended to be
general in nature. Such advice can only be properly given by qualified
professionals who are fully aware of a user's specific geographical areas or
circumstances, such as an attorney or accountant.
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