FORMING A BUSINESS
Express Legal Help Center currently offers the following products to assist you in forming the most common types of business entities:
CORPORATION - LLC - DBA
- • C corporation
- • S Corporation
- • Non-Profit Corporation
- • General Partnership (GP)
- • Limited Partnership (LP)
- • Limited Liability Company (LLC)
- • Sole Proprietor
How Do I Form a Business Entity?
Listed below are the general steps to take in forming a business entity:
Choose a business name.
An important step will be to select the name for your business. In general, the name of your business entity must specify the type of business entity you are forming. For example, a corporation must end with the words "Incorporated", "Corporation", "Company", "Inc.", "Corp." or "Co." There are similar requirements for limited liability companies, and limited partnerships. Because there are slight variations state by state, it is best to check your state law before selecting a name or refer to your Express Legal Help Center workbook which will provide you the acceptable options for your state of formation. Once you have formed your entity, your business name may be protected in the state your entity is formed, and if you expect to be doing business out of state, you may consider filing a trademark at some point (Express Legal Help Center may be able to assist you with the trademark).
Prepare formation document.
You will also need to prepare the initial formation document that is usually filed with a state to formally create your business entity. The formation document for corporations is usually referred to as the Articles of Incorporation (sometimes Certificate of Incorporation), for limited liability companies it is the Articles of Organization (sometimes Certificate of Organization), and for limited partnerships it is the Certificate of Limited Partnership. General partnerships generally do not have to file a formation document with the state.
File formation document with your State.
Once the formation documents have been prepared, reviewed and signed, they need to be filed with the appropriate state office. Most often if they are filed by mail, the original and one copy should be provided. On average, it takes 4-6 weeks to form a business entity. Expedited services are available in many states. Accompanying the completed formation document for filing must be the filing fee. Filing fees range from $70 to $500.
Apply for Employer Identification Number (Tax ID Number).
You should also complete and file IRS Form SS-4 (Application for Employer Identification Number). This may be important in many cases whether or not the business entity is expected to have employees.
Prepare governing documents.
In addition to preparing the formation document (i.e., Articles of Incorporation, Articles of Organization or Certificate of Limited Partnership), you also need to prepare a document that governs the internal rules of your business entity. The governing documents are bylaws for corporations, the operating agreement for LLCs, the partnership agreement for general partnerships, and the limited partnership agreement for limited partnerships. They explain such matters as holding meetings, voting, elections, and powers of the owners and management. The governing document is generally not filed with the state.
Hold organizational meeting.
For corporations, the shareholders and directors will meet to organize the corporation. Business conducted at that meeting includes adopting the bylaws, electing the initial directors, and other business matters. For business entities other than corporations, an organizational meeting is generally not required.
File additional documents with your State or the IRS.
If you wish to have your C corporation designated as an S corporation, you will need to file Form 2553 to make the S corporation election. For new corporations, the S corporation election may be submitted at anytime during its tax year so long as the filing is made no later than 75 days after the corporation has begun any of the following activities (whichever is earliest): conducted business as a corporation, acquired assets, or issued stock to shareholders. You should check your state laws to determine if you need to file any additional documents. California, for example, requires that new business entities file a Statement of Information upon formation (as well as annually).
Obtain any necessary licenses and permits.
You will also want to secure any licenses and permits that may be required for you to legally operate your business.
We make the process simple and affordable. Contact us today for a free consultation.