The company is automatically recorded when the articles of incorporation have been filed. The owner must file a fictitious or assumed name assertion with the jurisdiction in which the business is located if the company is to operate under a different name. Forming a Corporation happens when several investors, each of whom owns shares in the corporate entity, join together to form a new company and work toward a shared purpose. The great majority of businesses exist to maximize profits for their owners. Non-profit corporations, on the other hand, include groups like charities and fraternal entities. The laws of each state view a corporation organized in that state as a domestic corporation and a corporation organized in any other state as a foreign corporation.

There also may be additional state-specific administrative requirements. It is best to consult with your Secretary of State to determine the requirements. Once the articles are approved, you will receive a certificate of formation.

Corporations

Once incorporators agree on the state in which to incorporate, they apply for a corporate charter. A corporate charter is a contract between the state and the incorporators, and their successors, granting the corporation its legal existence. The application for the corporation’s charter is called the articles of incorporation. Some common fringe benefits include health insurance, childcare reimbursement, employee discounts, or even a subsidized lunch or snack program.

• Both organization and foreign registration entail the payment of initial and annual fees which can add up to substantial amounts of money over time.
• One of the first steps of starting a business is choosing the best legal structure.
• To remain active as a corporation in Florida, you must file what’s known as the Annual Report.
• You’ll need to pay “foreign qualification” fees when you register, name a “registered agent,” pay “franchise taxes,” and make required annual reports to Delaware.
• Profits and earnings generated by the cooperative are distributed among the members, also known as user-owners.

By submitting this form, you are indicating that you would like one of our representatives to contact you about the details you provided. We provide you with your completed filings and any other necessary documentation. Sit back and relax while one of our filing experts completes the required paperwork quickly and accurately on your behalf. To learn more about the differences between an llc and a corporation, take a look at our detailed llc vs corporation comparison.

Publications

To elect S-Corporation status a corporation must meet all the requirements of an S-Corporation and must submit IRS Form 2553. An EIN is required for any business that hires employees or operates as a corporation. Nonprofits must file with the IRS to get tax exemption, a different process from registering with their state. A benefit corporation, sometimes called a B corp, is a for-profit corporation recognized by a majority of U.S. states. B corps are different from C corps in purpose, accountability, and transparency, but aren’t different in how they’re taxed. S corps can be a good choice for a businesses that would otherwise be a C corp, but meet the criteria to file as an S corp.

Every day, we help people discover products and services that can help their business bloom. In addition to registering your business with the Secretary of State, you’ll also need to register with the IRS, state, and any local tax agencies. Within the blanket term “corporation,” there are a few specific entities that you can choose from.

Maintain corporate minutes

Incorporating your business separates you from your business as a separate legal entity, preventing you from being fully responsible for any debts accrued by your business. A corporation with two or more shareholders may require the efforts of all of the shareholders to succeed, especially in the early life of the business. If one shareholder withdraws or dies, the existence of the corporation may be threatened. To protect the corporation and the remaining shareholders, consider buy/sell agreements and key man life insurance policies on the shareholders. Again, the most critical step is to record the minutes of this meeting and put them in that record book (binder) from step six. Your first board meeting is a critical step, but I recommend that you focus on the minimum required steps to fully comply, and save deeper discussions for other venues.

Technically speaking, an S corp isn’t a type of corporation—it’s a tax designation status granted by the IRS. This designation allows the corporation to pass income to shareholders on their personal returns. The business itself isn’t taxed, therefore avoiding the double taxation of a C corp. A California LLC generally offers liability protection similar to that of a corporation but is taxed differently. Domestic LLCs may be managed by one or more managers or one or more members. In addition to filing the applicable documents with the Secretary of State, an operating agreement among the members as to the affairs of the LLC and the conduct of its business is required.

How to start a corporation: A 9-step guide

Kelly DuFord Williams, founder and managing partner of Slate Law Group, outlined six general steps a small business must take to become a corporation. However, every state has specific guidelines, so your process may vary. Check the specific corporation requirements for the state where your business will operate. A private or “closed corporation” may have a single shareholder or several. In the U.S., corporations are created and regulated by state laws.

This list includes words that are off-limits for use in your business name. If you need assistance, please contact the Massachusetts Department of Revenue. LLCs making political contributions must file a form with State Board of… All you need to do is answer some questions about your business, and they’ll take care of the rest. Your corporation should determine whether it needs any permits or licenses to operate.

The incorporation services start at just $149 plus state filing fees. If you’re not 100% satisfied with LegalZoom’s service, you can request a refund within 60 days. Rather than paying a business attorney outrageous fees to walk you through this process, you can use an online incorporation Forming a corporation service to get set up. An S corp is unique because it’s not a type of business structure. Traditionally, the board of directors has had the power and the duty to manage the corporation. Therefore, the law permits a corporation to be managed under the direction of the board of directors.

Certificates of Incorporation submitted through the mail should be marked with the notation “Expedited Handling” on the envelope and in your cover letter. Certificates of Incorporation submitted via fax with the Credit Card/Debit Card Authorization Form must specifically indicate the level of expedited processing requested. No formation documents are filed with the California Secretary of State’s office. Other state filings may be required depending on the type of business. The articles of incorporation function like the constitution for the corporation. Ordinarily, the document is short and simple, and you can prepare your own in a few minutes by filling in the form provided by the Secretary of State’s website.

What Is the Difference Between a Limited Liability Company and a Corporation?

Indeed if you are working with a lawyer, they should make this process feel comfortable for your company’s needs. A fun (and useful) fact is that the lowest value a new share can have is zero dollars. It may seem odd, but this can be the simplest option for a company that doesn’t need cash to start. Using this approach, you could issue 1,000 shares each to four stakeholders at a value of zero dollars (or “no par”), and no money will need to be exchanged.

Sole proprietorships and LLCs are usually cheaper and easier to start. Using an online incorporation service ensures accuracy and timely filings with your state. However, registering as a C corp does not mandate that a company exists publicly. They could still issue stock privately, at which point other owners would have more control over who purchases shares. However, each shareholder must sign a form, that’s then filed with the IRS, in order to obtain S Corp tax status.

It sure sounds official, but your board of directors is just a group of people who are legally required to act in your company’s best interest. Check with your state on the minimum number of board members, but assume you might want three people serving in this capacity. If you are working with a lawyer, you should get their feedback on the name you choose. If not, you can send a name availability inquiry letter to your state’s Secretary of State office yourself.