Are you thinking about incorporating your small business? If so, you’re not alone. Many small business owners incorporate their businesses to protect their personal assets and gain tax benefits.
But what does it mean to incorporate a business? And can you do it online? In this post, we’ll answer those questions and look at three business incorporation services where you can incorporate your company online.
What does it mean to incorporate a business?
Incorporating a business means it becomes its own legal business entity, separate from its owners. This has a few advantages, including personal asset protection and tax benefits. But incorporation also has drawbacks, like more paperwork and compliance requirements.
Whether or not to incorporate your business is a decision that should be made with the assistance of a professional adviser. They can help you weigh the pros and cons and make the best decision for your company.
Can you incorporate an online business?
Yes, you can incorporate an online business. The process is mostly the same as incorporating a brick-and-mortar business, but there are a few key differences:
- First, you’ll need to choose a legal structure for your business.
- Then, you’ll need to get a registered agent and apply for an employer identification number (EIN).
- Finally, you’ll need to file the paperwork with the state in which you want to incorporate.
How do I incorporate my business online in the US?
- Choose where to register your corporation
- Run a corporate name check and reservation
- Register your corporation
1. Choose where to register your corporation
The first step in incorporating an online business is choosing the state where you will incorporate. You are not required to incorporate in the state in which your business is located, but many businesses do so because it is easier and cheaper to register and operate in their home state.
You may want to incorporate in a state other than your own if that state has laws that are more favorable to businesses, or if you plan to do business in multiple states and want to choose a state with a central location.
According to experts at LegalNature, the top three best states to incorporate a business are:
Once you’ve selected the state where you will incorporate, you must register your corporation with the appropriate state agency. In most states, this is the Secretary of State office, but in some states, it may be the Department of Commerce or the Corporation Commission.
You will need to submit the appropriate paperwork and pay the required fees. You may be able to do this online, or you may need to mail or deliver the forms in person.
💡 Tip: Check to see if you need a registered agent to register in your chosen state. The registered agent’s job is to receive LLC communications (like annual fee bills or lawsuits). The registered agent can be a member of the LLC or a third party. If you prefer to hire out, your state should have a list of registered agents.
2. Run a corporate name check and reservation
The second step in incorporating your business is choosing a corporate name. Once you have a few potential names in mind, you need to check to see if the name is available. This can usually be done online through the state agency responsible for corporations.
For example, if you’re filing an LLC in Delaware, you can use the Delaware Secretary of State business Entity Search to check the availability of your desired name.
You may also need to reserve the name with the state before officially registering the corporation. This is usually a simple process that can be completed online or by mail. It's important to choose a name that is not already in use and meets the state's corporate-name requirements.
💡 Tip: Your business name should also be easily distinguishable from other business names. Once you have chosen a name and checked to see if it is available, you can move on to the next step in incorporating your business.
3. Register your corporation
Registering your corporation is a simple process that can be done online or by mail. After checking to see if your name is available, here are the next steps to take:
- File Articles of Organization with your state. Once you’ve got a name and a registered agent, you’ll file your Articles of Incorporation, called a Certificate of Organization in some states. You can find the forms on your state’s website. You’ll generally need to include the following information:
- The name of your corporation
- Principal place of business
- An initial number of shares of stock issued and the par value per share
- The name of the incorporator or organizer (this can be you, a shareholder, or an attorney filing the application)
- The name and address of your registered agent
- The purpose of your corporation
- The names of one or more directors
- A copy of corporate bylaws
- Create an LLC operating agreement. The operating agreement outlines the LLC’s ownership structure. It’s not required in every state, but it’s helpful for multi-member LLCs. The operating agreement outlines how profits and losses are handled and each member’s rights.
- Address local, state, and federal business requirements. To form an LLC, you need an employer identification number, or EIN, from the IRS. It’s like a Social Security number for businesses. Depending on what you’re selling, you may also need various business licenses from your state or local government.
💡 Tip: An online incorporation service company can help streamline the registration process. It can help find a registered agent, submit your legal documents, and apply for an EIN.
3 best online incorporation services to register your business
Want to create a business entity with the help of a professional service, rather than file all the paperwork on your own? Here are three best incorporation services for forming a corporation.
Incorporate.com is a popular online incorporation service that has helped register businesses since 1899. The company offers a wide range of legal services to help business owners get their businesses up and running quickly and easily.
Incorporate.com makes it simple to form a corporation or LLC by providing all the necessary forms and filing requirements in one place. The company also offers various other business services, such as registered agent service, business license research, and more.
Since its opening in 1999, LegalZoom has become one of the most widely recognized LLC formation services. It’s helped millions of people incorporate their online businesses.
LegalZoom provides a business name availability search for free, extended customer service hours, and other business services you’ll like, such as an annual report service. LegalZoom is a bit more expensive than the average incorporation service, but it offers a 100% money-back guarantee within 60 days of purchasing its services.
ZenBusiness is a respectable corporation service company. It has a great Starter plan, which costs $49 and includes preparing and filing your Articles of Incorporation and annual reporting services, accounting consultations, and sample business documents and templates.
ZenBusiness uses automation to fulfill many formation tasks, which saves you time and money. It is also highly trusted, rated 4.6/5 based on more than 10,000 reviews on Trustpilot.
Create your business entity today
Incorporating your small business online has many advantages. Perhaps the most significant advantage is that it can help protect your personal assets from creditors and lawsuits.
Incorporating online is the fastest and easiest way to start a new business. By using one of the online incorporation services above, you can get up and running in an hour or two, and open the online store you’ve been dreaming of.
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Incorporate an online business FAQ
Where is the cheapest place to incorporate?
What’s the difference between LLC and C corporation?
What are 4 disadvantages to incorporating?
- Incorporating a business can be costly and time-consuming.
- There may be restrictions on what type of business can be incorporated.
- Incorporation can create a complex legal structure that can be difficult to navigate.
- Incorporating a business can create liability risks for the business owners.