Incorporating services are an important consideration when you want to establish a business, whether you decide to do this regionally or nationally. LLC (limited liability company) formation is important for businesses because is can establish a better relationship with your customers, reduce the risk of a tax audit, and deduct certain business expenses that are only available to businesses after they form an LLC.

Because it takes time to form an LLC corporation, working with incorporation services is necessary for many businesses. The benefits of working with the services include:

1. Incorporation service companies will do all the research for you when it comes to your business name.

2. Services will obtain the proper documents needed in order to file for and form an LLC.

3. The service will be able to file all the paperwork after you have filed it out.

Action Steps
The best contacts and resources to help you get it done

Work with a business incorporation service to determine whether to incorporate nationally

When a business wants to form an LLC, they have two choices. They can either incorporate their business only in the state in which the business is located, or they can incorporate nationally in order to have the ability to expand in more than one location.

I recommend: My New Venture offers expert advice about where a business should incorporate, and whether that should be a state or national incorporation. Inc Now in Delaware provides LLC services as well as information on how far an LLC can take your business, including national and international business issues for Delaware and other states.

Use a service to research names for your business incorporations

One of the most important parts of a service that provides incorporations is the research that they perform in order to make sure that business names do not overlap. If your business name has already been incorporated in that state, the service will find out and work with you to find a name that can be incorporated in that area.

I recommend: The LLC Expert provides information on common name issues that happen when a business wants to incorporate. Blumberg's Law Products provides a full services for incorporating your business, including the necessary research for business names.

Work with a service to obtain the correct documents to form an LLC corporation

There are many documents that need to be filled out and filed over the course of an LLC formation process. Some of these include registering your LLC name, creating operating and organization agreements, and obtaining licenses from local, state, and national entities. An incorporation service can help you get organized with all your filing deadlines.

I recommend: FindLaw provides a comprehensive checklist on what a business will need to do in order to form an LLC corporation. Companies Incorporated provides useful information about incorporating and services that can help you meet filing deadlines and stay organized throughout the process.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  When choosing a service for LLC formation, make sure that you choose a company that can file your LLC request in the state you will be doing most of your business.

Incorporating your business provides multiple benefits, including protecting your personal assets, providing a variety of tax-related savings, reducing the chances of an IRS audit, and increasing your company's credibility with customers. Corporations are classified as one of the following:

1. General - This is the most common type of corporation.
2. S Corporation - Popular with entrepreneurs and small business owners.
3. Limited Liability Corporation (LLC) - Similar to an S corporation, but with fewer IRS restrictions.

Action Steps
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Select an all-in-one incorporation package

The Company Corporation has been helping entrepreneurs incorporate their businesses for over 100 years. They offer soup-to-nuts incorporation services through their Web site, along with helpful, step-by-step advice on getting it done correctly in any state.

I recommend: Visit The Company Corporation web site for complete details.

Decide on a corporate name

Come up with at least two back-up names in case your first choice is already taken. You must file your corporate name with the Secretary of State in the state where you choose to incorporate. Note that some states may allow you to reserve a name for a nominal fee prior to sending in your documents.

I recommend: Check with your local Secretary of State to see if the corporate name you have chosen is still available.

Select a state of incorporation

Many business owners choose to incorporate in their own state, but you can choose to incorporate in any of the 50 states or the District of Columbia. Some states have more corporate-friendly laws than others-for example, no corporate income tax-so it's worth checking into other states.

I recommend: Find out what makes Delaware and Nevada so attractive to so many business owners.

File the appropriate paperwork

The Secretary of State where you choose to incorporate will provide you with a checklist of items and downloadable forms to complete. If you find the paperwork too time-consuming, think about hiring an outside company or an attorney to handle the details.

I recommend: Download an order form and do it yourself, or get help from an incorporation firm, such as MyCorporation.com or 101incorporate.com. To find an attorney, go to FindLaw.

Obtain State and Federal Tax ID Numbers

As a corporation, you'll need a Federal Tax Identification Number (also called an Employer Identification Number or EIN) from the IRS. The IRS uses this nine-digit number to identify businesses that are required to file various tax returns.

I recommend: Find out who needs a Federal Tax ID Number and how long it takes, then apply online at the IRS website. To find out if you need a State Tax ID Number, check with your state.

Select a board of directors

Corporations are required to have a board of directors. Board responsibilities include meeting at least once annually, establishing business policies, possibly electing the president of the company, and assuring that the company is operating lawfully. Keep it simple in the beginning, and elect only a few members to your board (including yourself).

I recommend: Learn more about the responsibilities of your board of directors at MyCorporation.com.

Bylaws

Bylaws are your official game plan, and are used for running the operations of your corporation. In general, your bylaws will outline the responsibilities of your directors and officers.

I recommend: See sample bylaws at FindLaw, and get help writing your bylaws with a corporate bylaw kit.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Keep business and personal finances separate by opening a corporate bank account.
• •  Keep accurate records, including financial records of all transactions and the minutes of all meetings.
• •  Hire an experienced accountant to file all of your corporate tax returns. Get expert help when you need it to avoid any problems down the road.
• •  Don't go out and order business cards and stationery with your corporate name until you've received notification that your name has been approved.

Businesses that use incorporation services have an easier time doing business in the state where they are incorporated. For instance, small business incorporation can protect an owner's personal assets and liabilities from being part of a lawsuit. But incorporation services for businesses have other perks. Incorporation gives companies more flexibility when doing business, lower taxes, and a better chance of finding outside investors willing to invest in the company.

Incorporation services provide legal advice and expertise, and are often necessary for companies that want to form an limited liability corporation (LLC) for businesses. However, incorporation services education and training can come from many sources, including:

1. Seminars that cover the topic of business incorporation and LLC formation.

2. Law programs that provide expert analysis and education on business law.

3. Online resources for companies that provide information on where, when and how to incorporate.

Action Steps
The best contacts and resources to help you get it done

Learn what types of incorporating services can benefit your business

Incorporation services provide you with multiple options for organizing your company into a legally recognized entity. Incorporation services can help you determine whether your business should be deemed a corporation, not-for-profit corporation, or an LLC. The right listing will help to save you a lot of money and potential legal issues later on.

I recommend: Proactive Management provides businesses with a side-by-side comparison of the different types of incorporation services available. Corpomax has a helpful table for comparing incorporation services.

Attend seminars to learn more about business incorporation services

Seminars can be an essential tool to learn more about incorporation services. These sessions will provide specifics on issues related to incorporation, such as taxes, asset protection, the benefits of incorporating in specific states, and more. Seminars may be held as public and private workshops, or online.

I recommend: Laughlin Associates provides a schedule of seminars that address different topics related to business incorporation and LLC companies. Companies Incorporated provides seminar topics on business incorporation and and forming an LLC.

Explore online incorporation services to better understand how your business can benefit

Many incorporation services provide articles, videos and guides to help your business decide whether it should incorporate, how to start the process, and give you a rundown on what is needed to complete an incorporation. Often these guides are written by lawyers who work for an incorporation service.

I recommend: Website 101 provides a basic tutorial on how to begin the process of incorporating your business. Learnthat offers a guide on how to incorporate your business or form an LLC.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Incorporation service companies can tell you a lot about which states and countries are best to incorporate in. Often this information is detailed and can help save you money.

When you start a new business, there are so many decisions to make. What business structure to use is one of the most important decisions. This one decision can impact how you conduct your business as well as liability and tax issues. Using an incorporation service can help bear the load's burden. An incorporation service can help find the correct documents, advise you on the different legal structures as well as research business names. You may find it beneficial to familiarize yourself with the following key terms.

Action Steps
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General corporation

Characteristics of a general corporation, also known as a C-corporation, include an unlimited number of shareholders with each one's liability related to the amount of their investment. This is the most common business legal structure for incorporation.

I recommend: Get more information about a general corporation through this chart by CorpoMax. You can also compare a general corporation to other business structures.

S corporation

An S corporation is a business structure limited to 75 shareholders with the benefits of an incorporation structure. The only difference is those filing as an S corporation can eliminate some of the double taxation imposed on corporations since corporations are taxed on business and shareholder income both.

I recommend: Find a side-by-side comparison of an S corporation to a limited liability company through Proactive Management.

Limited liability company (LLC)

A limited liability company isn't a partnership and isn't a corporation; it's a combination of the two. Advantages of forming a limited liability company include limited liability, flexible profit distribution to shareholders, flow-through taxation and less formal meeting requirements.

I recommend: FindLaw provides a comprehensive checklist on what a business will need to do in order to form an LLC corporation.

Federal tax identification number (EIN)

A federal tax identification number or EIN is issued by the IRS to identify a business entity. You will need to obtain an EIN number if you start a new business, hire employees or open a bank account, if your business is an LLC or corporation or if you need to make changes to an incorporation form.

I recommend: Get answers to your questions about federal tax identification numbers through the IRS.

State corporation

A state corporation, also known as a domestic corporation, is a company that only conducts business in the state in which it is incorporated.

I recommend: Check out this example of Arizona corporate tax procedure on how the state determines whether a corporation is domestic or foreign under tax law.

National corporation

A national corporation, also known as a foreign corporation, is a company that conducts business in the state in which it is incorporated as well as other states, and may even be entitled to doing business with other countries.

I recommend: My New Venture offers advice about where a business should incorporate, and whether that should be a state or national incorporation.