Download our Guide to Incorporating Your Business for free. This 15-page PDF outlines your business type choices, what to expect during the incorporation process and your post-incorporation requirements.
As a business owner, you face many decisions when it comes to starting, running, and growing your business. BizFilings’ Guide to Incorporating Your Business is designed to illustrate your options and help you decide what structure your business will take. It explains the advantages and disadvantages of incorporation, what the incorporation process entails, and your post-incorporation requirements—such as filing annual statements with your state of incorporation
The BizFilings Guide to Incorporating Your Business includes:
- Business type descriptions, advantages
- Sole proprietorship
- General partnership
- Limited partnership
- Limited liability partnership
- C corporation
- S corporation
- Limited liability company (LLC)
- Professional limited liability company
- At-a-glance comparison table for the most common business entity types
- Where to incorporate
- The incorporation process
- Post-incorporation and ongoing compliance requirements
- Using an incorporation service provider
The Incorporation Process
To form a corporation or LLC, formation paperwork must be filed with the appropriate state agency, usually the Secretary of State, and filing fees paid. This section describes the process typically required to form a corporation or LLC in any state, as well as typical costs and time frames.
Matters of public record and publication requirements
- Information included in the incorporation documents, such as names and addresses, become a matter of public record; in the Internet age, they are easily searchable by individuals, regulatory and tax authorities and data mining services.
- Some states require
publicannouncement of new business formations. A state may require that notice of the formation be published in a legal journal or specific, local newspaper for a designated amount of time.
and typical timeframes
A corporation’s formation document is typically called the Articles of Incorporation or Certificate of Incorporation, depending on the state. An LLC’s formation document is typically called the Articles of Organization or Certificate of Organization. Incorporation documents advise the state and the public of certain details concerning the company. Incorporation documents become a formal record of the corporation’s or LLC’s existence.
State corporation and LLC filing fees range widely. The typical time frame to have incorporation documents approved also varies.
Standard (non-expedited) incorporation filings can take four-to-six weeks to be approved and returned to the business owner. Most states offer expedited filing services for an additional fee, reducing the turnaround time for filing documents to a few days or even a few hours.
Mandatory corporation & LLC disclosures
LLCs and corporations must disclose certain information in their incorporation documents. The mandatory disclosures vary slightly by state.
The desired name of the corporation or LLC must be included. For corporations, it must typically include an identifier, such as “Corporation,” “Incorporated,” “Company” or an abbreviation of those terms. For LLCs, it must typically include the term “Limited Liability Company” or “LLC.” The state holds final approval rights on the desired name to ensure it is not already on the filing office’s records as being the name of another domestic or foreign business entity or that it is not “deceptively similar” to a name already on record.
A corporation’s incorporation document typically must include a brief statement of its business purpose, declaring the proposed scope of its operations. This may be required for LLCs in some states too. Business purpose clauses are either of two types, general or specific.
- General business purpose — Most states allow a general purpose clause, indicating that the company is formed to engage in “all lawful business.”
- Specific business purpose — Some states require a more complete explanation of exactly what type of business the company will undertake.
Most states require domestic and foreign corporations, nonprofits, LLCs, LP, and LLPs to name a registered agent, which is the party that receives and forwards important legal and tax documents on behalf of the company. The registered agent must have a physical address (no P.O. boxes) in the states of incorporation and must be available at that address during normal business hours. Examples of important documents typically delivered to the registered agent include Service of Process (Notice of Litigation), tax notices, and annual filing notices.
The person or company who initiates the company’s formation filing is the incorporator.
Most states require that the name, signature
Registered Agent (Professional Services)
The registered agent warrants additional discussion. The majority of states require corporations and LLCs to appoint and continually maintain a registered agent in the state where the company is formed. A business owner has the option of serving as the company’s registered agent as long as he or she maintains a physical address in the state in which the corporation or LLC is formed and is available during normal business hours.
There are many professional registered agent service providers that typically charge an annual fee. Many small business owners find their services advantageous, for reasons such as the registered agent’s name and address are included on the incorporation documents (instead of the owner’s) and are matters of public record, and ensuring someone is always present during normal business hours to facilitate receipt of documents delivered to the registered agent. Many professional registered agents also provide other compliance services as part of their fee, including software to keep track of important corporate information and provide alerts for upcoming compliance events. Some may also assist you with filing your company’s annual report, DBA (doing business as) filings, and business licenses, and monitor the status of your company with your state of incorporation.
Guides by Industry Type
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