Should You Form a Corporation?
Perhaps you've heard the benefits of incorporating your business? Some of them include tax savings, personal liability protection). But where do you start now? Back in the day, you would need to hire a lawyer and pay upwards of $1000 to $2000 to legally form your corporation. But there are much cheaper alternatives today online today.
Many services exist online to help you to form S- or C-Corporations and LLC's ("limited liability company) online. The prices for these services vary ranging from $100 to $600 per business formation, depending on the services provided and state where the corporation or LLC will be formed. There's so many choices online - literally thousands - which one is the right one for you? You can use comparison websites to compare the top incorporation services. Comparison websites list: LegalZoom, Intuit's MyCorporation and BizFilings as some of the top incorporation sites.
Incorporation services typically list three levels of packages. The first level is your basic level package, the second level will throw in some goodies like an incorporation kit and other services for around $100 more, and the third level will be their premier package where they throw in the works including expedited shipping and help with obtaining your Federal Tax ID.
S-Corp-Compare has a comparison table where you can compare the different features and prices for each of the websites. While it's doable that anybody could form a corporation on their own without the help of an incorporation service, an incorporation service does help a first-time business owner in going through the incorporation process. Here's a summary of the filing process:
1.) Visit legalzoome.com to view the price/feature differences between the online filing services.
2.) Go to one of the services (LegalZoom, Bizfilings, etc) and sign up for an incorporation.
3.) Submit your information and payment.
4.) Wait a few days (or weeks) for the filing service to send files back to you.
5.) Sign files, send back to filing service.
6.) Within 1-2 weeks, the filing service will notify you once your corporation has been filed with the state.
7.) Complete your corporate documents that were pre-filled by the filing service (Articles of Incorporation, Corporate Bylaws, etc).
And that's it! You're in business as a legal corporation. Some things that you should not forget to do:
1.) Make your monthly estimated tax payments for both federal and state taxes.
2.) Update your corporate information with the state once a year or else they may fine you up to several hundred dollars.
3.) Conduct at least one Board of Directors meetings once a year and record the meeting minutes.
If you have any further questions, visit s-corp-compare for details on becoming incorporated.
