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Oakclause

Business formation

Incorporate Your Business

A corporation is a separate legal entity owned by shareholders and managed by a board of directors.

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Why incorporate

It is often the right fit for businesses planning to raise outside investment or issue stock to employees.
  • Liability protection for shareholders, directors and officers
  • Easy to issue shares to investors, founders and employees
  • Perpetual existence independent of its owners
  • Option to elect S corporation tax status if eligible

How it works

The usual order of things, from picking a name to staying in good standing.

  1. 1

    Choose a name and state

    Your corporate name must be available in your state and include a word such as “Inc.” or “Corporation.”

  2. 2

    File articles of incorporation

    Sets out the corporation's name, authorized shares, registered agent and incorporator.

  3. 3

    Adopt bylaws and appoint directors

    The incorporator or initial directors adopt bylaws and appoint officers at an organizational meeting.

  4. 4

    Issue stock

    Founders buy shares under stock subscription agreements, and the issuance is recorded in a stock ledger.

  5. 5

    Tax registration and compliance

    Obtain an EIN, consider whether to file an S corporation election, and keep minutes and annual reports up to date.

Prefer to do it yourself?

Create the core documents with our guided templates.

Questions

What is the difference between a C corporation and an S corporation?

Both are corporations under state law. The difference is federal tax treatment: a C corporation pays corporate income tax, while an S corporation passes income through to shareholders. S corporations have limits on the number and type of shareholders.

Should I incorporate in Delaware?

Delaware is popular with venture-backed startups because of its well-developed corporate law. For many local small businesses, incorporating in the home state is simpler and cheaper.

Do corporations need to hold meetings?

Generally yes. Corporations are expected to hold annual shareholder and director meetings, or act by written consent, and keep minutes of major decisions.

How long does incorporation take?

It depends on the state's processing time, from same day with expedited service to several weeks for standard filings.