Form a Corporation with Incorporation Services
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Do I have to incorporate in the state where my company conducts business?
There is no requirement that your business incorporate in the state where it does business. However, you will be required to register for authorization and pay a fee in each state where your corporation does do business.
How do I choose a name for my corporation?
There are two main requirements for choosing a corporate name. First, the name cannot be the same or deceptively similar to another corporation's name. Second, the name must be followed by "Incorporated", "Inc.", "Corporation", "Corp.", or something like that depending on the state of formation Also, states tend to prohibit corporate names that use words that improperly imply that the corporation offers services related to banking, insurance, or government.
How do I know if I should form an S Corporation rather than a regular corporation?
Whether you should form an S Corporation depends on the circumstances and goals of your particular business. The main reason corproations elect S status is that there is only one level of taxation, meaning corporate profits and losses pass through to the shareholders. However, there are also several restrictions on an S Corporation, so this is a decision you should carefully consider.
How much does it cost to form a corporation?
The initial fee for filing formation papers varies from state to state - it can range from roughly $50 to $275. In addition to the initial fee, states often require that a corporation pay some form of annual fee to maintain its corporate status. This annual fee may be a state income tax, a franchise tax, and/or a simple filing fee. If the annual fee is a franchise tax, it is frequently based upon the total number of shares that the corporation is authorized to issue.
Is it necessary to have directors already selected when I form a corporation?
Depending on the state in which you are forming your corporation, you may need to know in advance who you will have serve as initial directors. Many states require you to provide information about the initial directors of the corporation when you are filing your incorporation papers. Even if you are not required to supply this information when forming your corporation, you are strongly encouraged to elect directors as soon as possible after the corporation has been formed. NowLegal obtains the names of the corporations's director(s) to provide only to those states that require director information.
Is there a difference between directors and officers?
Directors and officers both have the duty to act in the best interest of the corporation. Directors are elected by the shareholders to manage corporate affairs and make major business decisions for the corporation. The directors in turn appoint officers to manage the day-to-day affairs of the corporation.
What is the process for forming a corporation?
The incorporation process varies from state to state. Generally you must file incorporation papers, such as Articles of Incorporation, and pay a fee to the Secretary of State or equivalent state agency. Once formed, a corporation must adopt bylaws and corporate resolutions to deal with preliminary issues such as the appointment of officers and the issuance of shares. It is also important for the corporation to obtain a Federal Tax ID number from the IRS.
When I am forming a corporation do I have to indicate the number of shares that the corporation will be able to issue?
When forming a corporation, you will need to specify the maximum number of shares that the corporation will be authorized, or allowed, to issue. NowLegal provides a default number of shares that is intended to minimize the startup corporation's filing fees and tax liability.
Why do I need a registered agent for my corporation?
The law in each state requires that a corporation identify the individual or entity that will serve as registered agent for the corporation. States mandate designation of a registered agent as a certain point of contact for those doing business with a corporation. It is intended to protect those doing business with a corporation to enable them to initiate legal action against the business if necessary.
Why does a corporation have to obtain a Federal Tax ID number?
A Federal Tax ID, also known as an Employer ID, is essentially a social security number for a corporation. The Federal Tax ID number is critically important because a corporation must have one to hire employees, open a bank account, obtain a loan, line of credit, or credit card, enter commercial transactions, or operate its business in general.
Will I need a lawyer to form a corporation?
It is not necessary to have an attorney form your corporation. NowLegal.com's legal document preparation and filing service takes you through a simple online questionnaire, collects a nominal fee and the state filing fee, and effectuates the filing on your behalf. If you are interested in setting up a complex corporate structure, it may be in your best interest to contact a business attorney in your area who is on NowLegal.
