How Long Does it Take to Incorporate a Business?

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The most efficient and cost-effective way to incorporate your business is online through a registration agent. It is also the fastest way to incorporate your business. For an extra fee, an agent also obtains an Employer Identification Number (EIN) for your corporation. However, you can obtain an EIN yourself for free by going online to the IRS website. Applying for an EIN only takes a few minutes. Registering your business gives it tax advantages.

Incorporation

  • Incorporation is the process of forming a new corporation which recognizes it as a separate person under the law. The Articles of Incorporation with the appropriate state office is the legal document for forming a corporation. Each state has a business division responsible for processing new requests by businesses to incorporate. In New York, the Division of Corporations is responsible for processing documents relating to corporations. However, you can file incorporation papers in another state without having to do business there. For instance, Delaware, because of its attractive tax laws and pro-business environment, attracts many corporations. Many of the largest companies choose Delaware as their state of incorporation.

Incorporating Online

  • The fastest and most efficient method to incorporate your business is online. There are several online registration agents. Confirm that your business name is available. Besides the name of the company, you have to provide the business address and telephone number. You have to decide which incorporation type is best for your business. You can choose to incorporate as a LLC, S corporation or C corporation. Decide on the number of corporate directors and their responsibilities within the Articles of Incorporation and By-laws. Choose your share type such as common or preferred stock. Finally decide on a state where you plan to do business. While it may seem like a lot to do, the entire process takes just several minutes to complete online.

Alternatives

  • You have two options aside from using an online registration agent to incorporate your business. You can file incorporation papers yourself. This involves purchasing a do-it-yourself kit, filling out the incorporation papers and filing with a registration agent. You can also use the services of a lawyer. Both alternative incorporation methods take noticeably longer.

Corporate Responsibilities

  • A C corporation files its income tax using Form 1120 and an S corporation uses form 1120S. LLCs and S corporations pass their profits and losses to members (LLC) and shareholders (S corporation) who report the earnings results on their income tax returns based on their ownership share. If you operate a C corporation that earns income throughout the year, make quarterly tax filings and estimated tax payments. Failing to do so leads to fines, penalties and possibly a big tax bill when it's time to file taxes. If you incorporate in a foreign state, the business pays taxes to the state where it is incorporated and the state in which it does business. If your business has employees, it is required to file and pay employment taxes.

References

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