The process involved in forming a corporation is referred to as "incorporation." Incorporating involves completing and filing a "Certificate of Incorporation" or "Articles of Incorporation" with the Secretary of State, paying a share fee and a filing fee.
Once the proper documentation is approved and filed the corporation comes into existence. Once your corporation is formed, you must comply with corporate formalities. These formalities include holding annual meetings of directors and shareholders, adopting bylaws, and issuing shares of stock. Your attorney can assist in specifying the terms of the parties relationship while complying with corporate formalities.
Corporate formalities must be followed to maintain the protection of limited liability. Limited liability safeguards the personal assets of the owners, as shareholders of the corporation, against potential claims of creditors Failure to maintain the corporation's legal status properly creates the danger that you and not your corporation be held solely responsible against potential claims of creditors and other obligations.