How much does it cost to incorporate?

There are typically three types of fees for incorporation: a fee to file the articles of incorporation, which depends on your state; a first-year franchise tax payment, which can range from $800 to $1,000; and attorney fees, should you seek attorney help.

Is an LLC a corporation?

No. Though both are a type of business entity, LLCs (or limited liability companies) have a different ownership structure and less reporting requirements.

S Corp vs. LLC: What's the difference?

Both types of business entities protect owners so they're not personally on the hook for business liabilities or debts. LLCs have one or more individual owners, while corporations have shareholders, and corporations generally have more formal record-keeping and reporting requirements. Even though LLCs are considered easier to start and maintain, investors tend to prefer corporations.

How does forming a corporation protect my assets?

It helps ensure that you and other shareholders aren't personally on the hook for company debts and liabilities.

What are articles of incorporation?

Articles of incorporation are a requirement for forming a corporation. They comprise a formal document that establishes the corporation as a separate business entity. The articles become a public record and provide important information about the corporation, including its name, contact information, and information about its shares of stock. The exact information that the articles need to include vary by state.

What are corporation shareholders, what are shares, and what types of shares are there?

Owners of a corporation are called shareholders, and they elect directors to oversee business operations. Corporate profits, called dividends, are distributed to shareholders according to the number of shares each owns.

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What is a corporation?

A corporation is a business entity created by filing formation documents with the state, a process also known as incorporation.

Just like an LLC, a corporation is a legal entity that is separate from its owners, which can protect you from any business liabilities or debts. However, corporations offer other important benefits, like shareholders and the ability to seek outside investors.

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Why start a corporation?

Corporation benefits: What are the advantages?

Attract investors

Raise funds by appealing to investors who may prefer corporations for the ability to offer stock.

Entice employees

Attract and keep top talent by offering competitive benefits packages that include shares of your company.

Look more official

Corporations are often seen as more credible, which can make it easier to do business with other companies.

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Corporation benefits

There are several advantages of forming a corporation. Incorporating offers liability protection, which means that owners of a corporation are generally not personally responsible for business obligations like debts or lawsuits. Incorporation also allows you to add shareholders and raise money from outside investors.

Corporation requirements

Corporations are typically required to adopt by-laws, hold annual shareholder meetings, issue written corporate resolutions for significant decisions, and file annual reports. Our service allows you to efficiently form your corporation the right way. We also have packages with essential documents and services to meet these corporation requirements and keep you in compliance.

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S Corp vs. C Corp: What's the difference?

S corporation and C corporation designations are both valid choices when incorporating a business—and whichever you choose, we can help make it happen. Before you make your decision, make sure you understand the pros and cons of each.

S Corp

Taxes on profits only

Shareholders only pay taxes on profits received. Income gets passed through to the owners instead of being taxed at the corporate and shareholder level, so you avoid double taxation.

Shareholder maximum

The maximum number of shareholders is 100, and they all must be U.S. citizens or residents.

Only common stock available

S corporation owners can only get common stock, which comes with voting rights.

C Corp

Taxes on income and profits

Income is taxed twice—the business pays taxes on its net income, and then the shareholders also pay taxes on the profits they receive.

No shareholder maximum

There are no limits on who and how many people can own shares.

Preferred stock available

Owners may get preferred stock, which usually comes with no voting rights but priority to dividends before common shareholders.

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How to incorporate

Choose and reserve a business name

The catchier and more memorable your business name, the more likely it is that consumers will choose you over your competitors. We include a name check with our formation services and can reserve names for you, if possible in your state.

Appoint a registered agent

Most states will require you to appoint a person or entity as a registered agent (also called an agent for service of process or statutory agent). A registered agent agrees to receive lawsuits, subpoenas, and other official documents on behalf of your business. You can appoint us as your registered agent to make things easier for you.

Prepare and file articles of incorporation

Although requirements differ by state, corporations generally must file articles of incorporation. These constitute the charter and legal framework for the business and may contain key information such as the principal location where business will be conducted. When we file these articles for you, it's typically sent to the Secretary of State.

Frequently asked questions

Why use LegalZoom to incorporate your business?

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Incorporate your business in 3 easy steps with the industry leader in online business formation.

Set it up right

Our tools offer step-by-step guidance to help you launch and protect your new business.

Get the help you need

Our network of experienced professionals can guide your launch and help you grow.

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What our customers are saying

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Process was smooth, customer support was top notch, and all questions answered. I'll be using their services again in the future.

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The process was quick, easy and cost effective. Great value for the money. I was able to get everything I needed.

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