Incorporation Checklist: Everything You Need to Know

An incorporation checklist is an important tool that will help you make an informed decision about what type of business structure is right for you.3 min read

An incorporation checklist is an important tool that will help you make an informed decision about what type of business structure is right for you. It can also help ensure you have all the information and necessary documentation when you start the incorporation process.

Choosing your business structure will primarily depend on your business's goals. There are three main options for incorporation in the United States:

  • LLC: Owners are taxed on their dividends.
  • Traditional corporation: The business is a separate legal entity that pays taxes on its profits. Owners run the risk of being taxed twice as they also pay taxes on personal gains.
  • S corporation: Structured similar to a traditional corporation but avoids double taxation. S corporations are formed by a special tax election, and there are strict requirements about who qualifies.

Articles of Incorporation

To form a corporation, you need to file articles of incorporation, which is sometimes referred to as a charter or certificate of incorporation. This document is typically filed with the Secretary of State's office in the state you plan to incorporate in. The state business registrar is the person who handles the articles of incorporation. Only a few states use another agency, but your Secretary of State's website will tell you where you need to file. The articles of incorporation must be filed prior to conducting business as a corporation.

Starting a Corporation

There are several steps you must take in order to form a corporation.

  • Choose a name that is different from any other businesses operating in your state.
  • Create a business plan that discusses your goals, what products or service your business will offer, your demographics, competitor analysis, three-year roadmap, projected financials, etc.
  • Buy your website domain name.
  • Appoint corporate officers who will handle the business's day-to-day operations.
  • Issue shares.
  • Ensure your intellectual property is well-protected. It should be owned by your company rather than one of the founders.
  • Obtain your EIN or Employer Identification Number. You can obtain this number online from the IRS.