How to incorporate

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Choose a business structure

Managing your business LLC S-corp C-corp Nonprofit Sole proprietorship

Limited liability
Incorporation can protect business owners and shareholders from personal financial responsibility for business debts or liability.

Members are protected

Shareholders are protected

Shareholders are protected

Directors are protected

Sole proprietors are not protected

Management flexibility
Some entities are more rigid than others when it comes to structure

Members are protected

Variety of management structures

Defined by state and federal law

Strict management laws

No management structure

Favorable for financing
Depending on your goals, certain entity types may be more suitable.

Members are protected

Gains credibility when applying for loans and grants

Can distribute one class of stock to up to 100 people

Can issue multiple classes of stock to unlimited shareholders

Gains credibility when applying for loans and grants

Compliance requirements vary by state and entity type

Members are protected

Payroll requirements may create operational overhead

Requires more complex accounting and potentially more reporting and fees

Typically the most demanding due to tax-exempt status

No requirements or fees

Unlimited lifetime
Succession planning may be important to you. If so, you'll need a business structure that enables a smooth transition.

With the proper planning, LLCs can exist for generations

Existence is not tied to specific shareholders

Existence is not tied to specific shareholders

Existence is not tied to specific directors

No longer exists when the owner quits or passes away

Limited Liability Company FAQs

An LLC is a relatively new type of business organization. The first LLC law was passed in 1977. Since then, every state has enacted legislation allowing the formation of LLCs. LLCs share a significant characteristic with corporations: limited liability. Corporate officers, directors, and shareholders cannot be held liable for any debts of the corporation unless they are liable under other laws. This is true only if management takes care to preserve the corporate formalities, such as maintaining separate bank accounts, holding regular meetings, making minutes of those meetings, and generally treating the corporation as a distinct entity under the law. If management fails to take the steps, then the law allows the "piercing of the corporate veil" which can subject officers, directors, and shareholders to individual liability. An LLC has the same protections from liability as the corporation—and the same vulnerability if not treated as a separate entity. LLCs also share a significant characteristic with partnerships, or, if the LLC is owned by a single member, with individual taxpayers. Income to an LLC is not taxed at the entity level. Instead, it is included in the income tax returns of the partners or single individuals who own the LLC.

To organize an LLC, you must file a document with the state in which the LLC is to be created. This document is usually called the Articles of Organization, but sometimes it is called something else, depending upon the state. The Articles of Organization state the name of the LLC, its business address, and the types of business the LLC will engage in. The Articles of Organization also state the name and address of the registered agent for the LLC. The registered agent is the person or company that serves as the contact point between the state and the LLC. The registered agent also receives official correspondence from other businesses.

How long it takes to get an LLC depends upon the state in which it is organized. In the past, organizers would mail Articles of Organization to the state, along with the required filing fee. Later, some states began authorizing fax filing. Today, most states have set up e-filing systems that allow filing of various documents, usually including Articles of Organization for an LLC. Again, depending upon the state, registration of the LLC can be accomplished online in real time. When that occurs, an LLC can be completely set up in only a day or two. However, other states have significant lag times, some in the range of two to three weeks for approval, even if the registration is filed online. Some states include on their websites the expected wait time to process a filing. Others state the date of the most current documents they have processed to give people an idea of how long it will take for approval of a filing. In short, it can take between a day or two and the better part of a month to organize an LLC.

Popular business entities

Form an S-corp
Structure your business for generations of success

Form a C-corp
Set your business up for scale. Great for venture capital

Form a nonprofit
Make your organization official. Let us help you start your nonprofit


Federal Taxes: You can file taxes as a "disregarded entity" or as a corporation.
You can file to form an LLC on your own by providing all the paperwork;
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