CORPORATION FORMATION

Start Your Corporation With Confidence

A corporation is a separate legal business entity that can be suitable for businesses looking to establish a formal ownership and management structure.

Corporations can offer limited liability protection to their owners and may provide opportunities to raise capital through shares of stock. However, corporations can also involve more formal requirements and ongoing compliance responsibilities than some other business structures.

At Hangama Biz, we provide simple information to help you understand corporation formation and compare business formation services.

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What Is a Corporation?

Businesses seeking a formal management structure

The best business structure depends on your business goals, ownership, activities, location, tax considerations, and other circumstances.

A corporation is a business structure that is legally separate from its owners. Ownership is generally represented by shares of stock, and the business is typically managed through a formal organizational structure.

Corporations may be suitable for:

Startups planning to raise investment
Growing businesses
Businesses with multiple owners
Companies planning to issue shares

How to Form a Corporation

Choose Your State

Decide where you want to form your corporation. State filing fees, requirements, taxes, and compliance obligations can vary.

Choose a Business Name

Select a corporation name that meets your state's requirements and is distinguishable from existing registered businesses.

Select a Registered Agent

Corporations generally need a registered agent in the state where they are registered. The registered agent receives certain official documents and legal notices on behalf of the corporation.

File Articles of Incorporation

Corporations are commonly formed by filing Articles of Incorporation or a similar document with the appropriate state agency.

Establish Corporate Structure

Set up the corporation's ownership and management structure. This may include shareholders, directors, and officers.

Create Corporate Documents

Corporate documents may include bylaws, organizational resolutions, shareholder information, and other records needed to establish the corporation.

Get an EIN

A corporation generally needs an Employer Identification Number (EIN) from the IRS for federal tax and other business purposes.

Maintain Your Corporation

After formation, corporations may have ongoing requirements such as annual reports, state fees, tax filings, corporate records, and other compliance responsibilities.

Corporation Formation Services

Need Help Forming Your Corporation?

You can handle the corporation formation process yourself by following your state's requirements, or you can use a business formation service to help with administrative tasks.

When comparing formation providers, consider:

Formation service fees
State filing fees
Registered agent services
EIN assistance
Corporate document options
Compliance services
Customer support
Ongoing service costs

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Corporation Formation Checklist

Before forming a corporation, consider the following:

☐ Choose your state
☐ Choose a corporation name
☐ Select a registered agent
☐ Prepare Articles of Incorporation
☐ File formation documents
☐ Establish shareholders and directors
☐ Create corporate bylaws
☐ Obtain an EIN
☐ Check licenses and permits
☐ Open a business bank account
☐ Understand ongoing compliance requirements

Corporation vs. LLC

Choosing between an LLC and a corporation is an important decision for many business owners.

Feature LLC Corporation

Liability Protection Generally available Generally available

Ownership Members Shareholders

Management Flexible More formal structure

Stock Generally not issued as corporate stock Shares of stock

Compliance Varies by state Often more formal

Investment Potential Depends on structure May be suitable for raising investment

Your choice should be based on your business goals, ownership structure, tax considerations, and other circumstances.

LLC & CORPORATION

Choose the Right Corporation Formation Option

Build Your Business on a Strong Foundation

Forming a corporation is an important step. Before choosing a formation service, compare your options and understand the requirements that apply to your business.

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Affiliate Disclosure

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Disclaimer

This page provides general educational information and is not legal, tax, accounting, or professional advice. Corporation requirements, fees, taxes, and compliance obligations vary by state and individual circumstances. Always verify current requirements with the appropriate state or federal agency or consult a qualified professional when necessary.