The internet completely revolutionized business as we know it. Transactions process faster. Communication that used to take days or weeks can be completed in seconds.
Amid a climate of proposed deregulation and streamlined small business operations, BizFilings, and incorporating online, turns 21 this year. And while the title of this article may refer to online “incorporation” it is important to remember that today limited liability companies (an unincorporated entity) are the most commonly formed entity for small businesses. So really, what we are celebrating is the birthday of online incorporations and LLC formations.
What is incorporating/forming your business online?
People that want to do business as a corporation or an LLC, rather than owning the business in their own name, are required to file certain paperwork with the state to create that entity, as well as appoint and maintain a registered agent, provide annual reports and meet other requirements. In the past, paperwork was filled out by hand and delivered via postal mail or in person to the government agency responsible for corporations or LLCs in that state. But as internet transactions became common, states started allowing companies to submit information electronically, including paperwork required to form the entity.
The technology’s ability to break down barriers to business formation is key to its success, especially given the business climate where employment is more fluid than ever and consulting or freelancing is common.
“Many in the ‘gig’ economy - from freelance filmmakers to Lyft drivers – seek to incorporate or form an LLC,” says Krista K. Stein, Channel Director, Small Business at Wolters Kluwer’s BizFilings.
BizFilings was one of the first providers to offer incorporation and formation online. Co-founder Brian Wiegand stumbled upon the idea in 1996 when he had a difficult time incorporating one of his businesses. The company's subsequent success help spawn a multibillion-dollar industry that upended the way legal services are sold and consumed.
How Does Online Incorporation/Formation Work?
Corporations are formed by filing a document generally called articles of incorporation. LLCs are formed by filing a document generally called articles of organization.
While you can file the paperwork yourself, services exist that allow you to submit the information without the hassle of filling out the required forms.
Though the form names and requirements vary depending upon the state where they are filed, the following basic steps explain the online incorporation process:
- Consult with a professional and decide on the business type. You can check an online tool first
- Choose where to incorporate
- Appoint initial corporate directors or initial members/managers of the LLC
- Decide on a registered agent
- Submit appropriate paperwork (Articles of Incorporation or Organization) as directed by the state office and pay the fees
- Make sure you research what licenses and permits are required – many entrepreneurs minimize this step, but dong so can put them at higher risk for fines and loss of good standing
Where Online Incorporation/Formation is Headed
For BizFilings, Krista K. Stein, Channel Director, Small Business at Wolters Kluwer’s BizFilings says “our goal is to find ways technology can reach and help entrepreneurs who might – certainly twenty years ago - not otherwise have the opportunity to form a corporation or LLC and launch their businesses."
A recent partnership with the State of Delaware is a good example of this. Wolters Kluwer's BizFilings launched a hybrid partnership with them. It provides online incorporation/formation in places where entrepreneurs are likely to seek help, like local libraries.
Shante Hynson took the leap to form her Delaware business Renee Alexander Jewelry LLC through this partnership. She hopes her company will become the ‘Stitch Fix for Jewelry, but with a twist.’
“It was helpful to have some in-person guidance along with what was provided online,” says Hynson, who formed her LLC at the Delaware central library on the day of the program’s launch.
Forming a corporation or an LLC?
To form a corporation or an LLC, Articles of Incorporation or Articles of Organization must be filed with the state and the applicable filing fees paid. With our incorporation/formation. service packages, BizFilings handles the whole process for you, making starting a corporation or an LLC quick, easy and simple. Get Started