How to Form a Corporation in 11 Steps

A corporation is a legal entity that is break from its owners, which can protect you from any clientele liabilities and help get your commercial enterprise off the background .
Business partners around a table to get ready to form a corporation.
Whether it ‘s to save money on taxes, attract investors, protect yourself, or boost respectability, starting a corporation might be the best following step for you and the business .
A corporation is a legal business entity that's separate from its owners. Illustration shows two blue buildings sitting side by side.

In this objet d’art, we ‘ll walk you step by gradation through the internalization march, review state-specific requirements, and answer some common questions you may have along the means .

1. Choose a Business Name

An important first step when starting a corporation is selecting a business name. In most states, you ‘ll need to include a corporate designation or a word that identifies your business as a pot .
Examples of bodied designations include :

  • Incorporated (Inc.)
  • Corporation (Co.)

When choosing a bodied appoint, you should besides be sure that your name of choice does n’t infringe on any existing trademarks. A hallmark search can help you ensure that your list is available to use .
It ‘s besides a good estimate to check your submit ‘s list of restricted words. This list includes words that are off-limits for use in your business diagnose. Examples include “ bank ” and “ policy. ”
certain words are prohibited unless you are legally allowed to run your clientele as such by the respective politics means. To ensure that your name is legally available, check with your express ‘s Secretary of State office .

2. Register a DBA

If you want to do business under a name that is different from the corporate name you ‘ve chosen, you may need to register a fabricated list. This allows you to keep the identity of your corporation classify from your clientele name .
A assumed name may besides be known as :

  • Doing business as (DBA)
  • Assumed name
  • Trade name

Depending on where you ‘re located, the laws surrounding DBA names can vary. Be certain to check with your express ‘s Secretary of State office to ensure your DBA name meets all legal guidelines .

3. Appoint Directors

When forming a pot, the owners will often appoint directors. The owners can appoint themselves and/or others to be directors .
A director ‘s responsibilities include :

  • Governing the corporation
  • Managing the corporation’s business and affairs
  • Electing corporate officers
  • Attending corporate meetings

The number of directors needed will depend on the laws and guidelines of your state of matter and could besides depend on the number of owners your pot has .

4. File Your Articles of Incorporation

future, you ‘ll need to complete and file articles of incorporation with your state ‘s Secretary of State office. By doing then, you will establish your corporation as its own clientele entity .
Articles of incorporation include the name and address and purpose of the corporation, the name and address of the registered agent, and the type and number of stock to be issued.
Articles of internalization typically include the :

  • Name and address of the corporation
  • Purpose of the corporation
  • Name and address of the registered agent
  • Type and number of shares of stock to be issued

The register agent is the contact person listed for your pot. They will receive service of process notices, government symmetry, and compliance-related documents on behalf of your corporation .
Depending on your country, articles of internalization may be called the certificate of formation or certificate of incorporation .

5. Write Your Corporate Bylaws

Another significant step is writing corporate bylaws. Bylaws are written rules that determine how your pot will be governed .
bodied bylaw typically cover things like :

  • How many shares of stock your corporation can issue
  • How many directors are required
  • Meeting and record-keeping procedures

Although these bylaws are not required to be filed with the submit, it is an crucial part of the incorporation march. It can be helpful to reach out for legal aid when writing corporate bylaws to make surely nothing slips through the cracks .

6. Draft a Shareholder Agreement

A stockholder agreement will help protect the interests of any remaining shareholders in font certain events take place .
This agreement will be used :

  • In the event of an owner’s death
  • If an owner transfers ownership of their shares

While optional, a stockholder agreement is a bang-up document to have in an unexpected event. If needed, a business lawyer can help you draft this text file .

7. Hold Initial Board of Directors Meeting

No matter how many directors your pot has, it ‘s important to hold an initial confluence with your integral circuit board of directors. Without an initial touch, the circuit board might lack management or clarification that enables them to make clear up decisions about the pot .
An initial board of directors meeting should cover :

  • Adoption of corporate bylaws
  • Appointment of corporate officers
  • Authorization to issue stock

additionally, if you wish to elect S pot condition, you should besides discuss this at the initial meet and gain approval .

8. Issue Stock

In this kind of business structure, stock is issued to help finance the pot. After the board of directors has authorized the issue of livestock, you may begin issuing and distributing stock to investors .
When you issue stock, you should note who buys shares, how many shares they bought, the cost of the shares, and the date of the transaction.
When issuing stock, it ‘s important to record :

  • Who purchased the shares
  • How many shares they bought
  • How much the shares cost
  • When they bought the shares

Stock is typically issued as a physical certificate or in the form of digital shares.

9. Obtain Business Permits and Licenses

Before you can start doing occupation as a pot, it ‘s besides important that you obtain all of the compulsory business permits and licenses .
The permits and licenses required will depend on your :

  • City and county laws
  • State government and federal laws
  • Your specific industry

As you begin the application procedure, check out your state ‘s specific requirements on the Small Business Administration web site .

10. Register Your Business

Because corporations are separate taxpaying entities, you will need to obtain specific tax ID numbers to ensure you are paying the appropriate taxes .
You will probable need tax ID numbers from :

  • The Internal Revenue Service (IRS)
  • Your state revenue agency

Depending on the state you ‘re doing clientele in and your corporation type, the tax income your corporation could face will vary. For the most up-to-date data about the tax income of corporations, you can visit the IRS web site .

11. Open a Corporate Bank Account

A crucial footfall in forming a pot is opening a bodied bank report. This report will be separate from the bank accounts of its owners, which helps protect your personal funds from any business liabilities. Be certain to check with the bank you choose to see what documents will be required .
Examples of needed documents and information include :
If you ‘re uncertain what your pot ‘s EIN is, you can obtain it from the IRS .

Forming a Corporation: A State-by-State Guide

Whether it ‘s the cost to incorporate, the difference in tax laws, or variation in document names, it is coarse for the internalization process to vary slightly from country to state. here are some states with some luminary differences in the internalization work .


When forming a pot in California, you must besides file a Statement of Information. This text file must be filed within 90 days of filing your articles of internalization .
This kind will besides contain the data that ‘s included in your articles of incorporation .


Delaware is a democratic submit to incorporate in because of its lenient laws for business owners. When incorporating in Delaware, you do not have to be a Delaware house physician. This allows those from early states to benefit from Delaware ‘s business-friendly tax advantages .


To remain active as a corporation in Florida, you must file what ‘s known as the Annual Report. This report form must be filed by May 1 .


When incorporating in Georgia, you must publish a notice of purpose to incorporate in a newspaper in the county where your agency will be located. This process must be initiated within one business day after filing your articles of incorporation and published once a week for two consecutive weeks starting within 10 days after receipt of the detect by the newspaper .


After registering as a corporation in Missouri, you must file the Missouri Annual Report within 30 days .


When forming a pot in Nebraska, you must besides publish a notice of internalization in a legal newspaper located in the lapp county as your corporation ‘s office .
The print notice must contain :

  • The name of your corporation
  • The number of authorized shares to be issued
  • The address of the corporation’s registered office and agent
  • The name and address of each incorporator

This work must take place after filing your articles of incorporation with the Nebraska Secretary of State .


Additional paperwork is required when filing your articles of incorporation in Nevada. You must besides file the Nevada Initial List of Directors and Business License Application .

New Mexico

To officially register your corporation in New Mexico, you must file the New Mexico Corporate Initial Report. It must be filed within 30 days of receiving your certificate of incorporation from the New Mexico Secretary of State .

New York

All New York corporations must file a argument every two years. This statement must be filed with the Secretary of State during the like month that the certificate of incorporation was filed .

South Carolina

As a corporation in South Carolina, you must besides file the Initial Annual Report of Corporations. This extra document must be filed with the South Carolina Department of Revenue along with your articles of internalization .


To officially create a corporation in Tennessee, you will need to file the Domestic For-Profit Corporation Charter. Similar to articles of incorporation, this text file will formally register your business as a pot. This document must be filed with the Tennessee Secretary of State .


To incorporate in Texas, you must file a certificate of formation with the Secretary of State. once this security has been filed along with the file fee, the corporation is official .


To incorporate in Washington, you must file the Washington Initial Report within 120 days of your incorporation date. You may besides include this report with your articles of incorporation .

Forming a Corporation FAQ

here are answers to some coarse questions you may ask yourself when determining if forming a corporation is the right move for you and your business .

Q: What’s the difference between a corporation and an LLC?

just like a corporation, a limited liability company ( LLC ), protects owners from business liabilities and debts. The independent dispute between the two is that an LLC has one or more owners, whereas a corporation has shareholders .
Another key remainder is the room the two are maintained. A corporation will by and large have more formal record-keeping and report requirements than an LLC.

Q: What’s the difference between a C corporation and an S corporation?

When incorporating your business, you may choose to form either a C or S corporation. One of the main reasons that people choose to form an S corporation is to save money on taxes .
As a C pot, you must pay taxes on your income twice—on the net business income and the profits received by shareholders. As an S corporation, you will lone pay taxes on the latter .

Q: Can I switch from an S corporation to a C corporation?

Yes, you are able to switch corporate designations. To do therefore, you must gain majority stockholder blessing to change your corporation ‘s condition with the IRS .

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Category : Finance

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