How to Incorporate Online

How to Incorporate Online

by Brette Sember, Esq., July 2017

Establishing a corporation may be the best choice for organizing your business. And setting up a corporation online is a simple way to register a company. Once you've created your corporation online, you'll be ready to get down to business.

Why You Need to Incorporate

When you incorporate a business, you are able to clearly define ownership, avoid double taxation (if you choose), create shareholders, limit liability, raise capital, and more. When you decide to incorporate your business, you can choose among several business registration options:

LLC

A limited liability company, or LLC, avoids the need for corporate taxes, while reducing your personal liability in the company. No board meetings or detailed decision-making records are required. This business type offers the greatest flexibility and is a common choice for sole proprietors, partnerships, or small businesses.

S Corp.

An S corporation does not pay corporate taxes and instead passes income through to its shareholders. Shareholders can also be employees, which can make it a good option for a family business or a partnership. There are a restricted number of shareholders in this type of corporation.

C Corp.

A C corporation pays corporate taxes itself and the profits are passed to shareholders who pay personal income tax on them. This type of corporation can have multiple classes of shareholders and allows outside investment.

How to Incorporate a Business

When you've decided which type of corporation is best for you and you are ready to set up your new company registration, the simplest option is to incorporate online.

Select Your Company Type

Consider the differences between LLCs, C corporations, and S corporations and select the type that will best suit your business needs. There are different filing requirements for each, so you should decide this before you start the online incorporation process.

Choose Your State

The next step is to select the state you would like to have your company formation registered in. It does not have to be where you live. Some people choose states that are known to be friendly to corporate businesses, such as Delaware, Wyoming, or Nevada. Consider the formation fees, annual fees, and state corporate tax rates when making your decision.

Use an Online Service

Once you've made these initial decisions, you can use an online incorporation service that will handle all of the filing and paperwork. You will still make all the important decisions, such as the name of your company, who will be your registered agent, the people who will be on the board of directors, and what rules will become your bylaws.

A questionnaire will ask you all the important questions and you'll be fully in charge of the details of your company. However, you will be able to skip having to fill out the confusing incorporation forms yourself and you won't have to figure out where and in what order they have to filed.

The name check, Articles of Incorporation, bylaws, and minutes will all be handled for you and filed with the correct fees paid. If you need an EIN, that will be obtained as well. Your corporation will be formed quickly and easily with little effort on your part, at a very affordable rate.

Choosing to form your corporation online results in a simple, time-saving process that allows you to keep your focus on the essentials of running your business. Making sure the incorporation is done correctly will give you peace of mind and help avoid future issues.