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 and disadvantages
- Sole proprietorship
- General partnership
- Limited partnership
- Limited liability partnership
- C corporation
- S corporation
- Nonprofit corporation
- Limited liability company (LLC)
- Professional corporation
- 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 public announcement 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.
Documentation, fees 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 and address of the incorporator (or organizer for LLCs) be included in the incorporation documents.
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
Startup requirements may vary by industry. We developed specific guides to starting and running a business in popular industries. Our guides cover considerations on key federal, state and local requirements unique to each industry. This information is relevent whether you are starting a new business or expanding an existing business.
A Guide to Starting and Running a Consulting Business
From your role as the owner of a consulting business to marketing your business, learn about the special considerations for starting and running a consulting business.
A Guide to Starting and Running a Freelancing Business
Whether you are considering starting a freelancing business or already operate one, this guide covers topics such as securing insurance, charging for your work and going full-time with your freelancing business.
A Guide to Starting and Running a Home-Based Business
This guide covers topics ranging from staying clear of scams and navigating local zoning rules to the tax benefits of running a home-based business.
A Guide to Starting and Running a Manufacturing Business
From choosing your manufacturing production process to financing your business, this guide outlines the unique aspects of starting and running a manufacturing business.
A Guide to Starting and Running a Nonprofit Organization
This guide will help you understand the unique aspects of starting and running a nonprofit organization, from navigating state and federal regulatory issues to fundraising.
A Guide to Starting and Running a Woman-Owned Business
While many women own and run their own businesses, not all choose to seek the designation of a woman-owned business. This guide outlines special considerations for starting and running a woman-owned business, from networking and resources to the certification process.