Business Incorporation: Start an LLC or Corporation
Starting an LLC or corporation involves more than submitting a form. Your choices affect ownership, taxes, financial records, and the responsibilities that continue after approval.
This guide helps you compare structures, decide whether to file directly or use a service, and complete the steps that make your business ready to operate.
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Start here: Choose the legal structure first, understand its tax treatment, and then select your filing method. A low filing price is useful only when the structure and services fit your needs.
Incorporation, LLC Organization, and Tax Elections
A corporation is incorporated under state law. An LLC is organized under state law. This page covers both, with a focus on businesses that require state entity filings.
Federal tax treatment is a separate decision. An LLC can remain an LLC legally while being taxed as a disregarded entity, partnership, or corporation. An eligible LLC or corporation may elect S corporation tax treatment.
| Term | What it means |
|---|---|
| LLC | A state-law limited liability company. Its owners are called members. |
| Corporation | A state-law entity owned by shareholders, with corporate governance requirements. |
| C corporation | A corporation taxed as a separate federal income-tax-paying entity. An LLC can also elect this tax treatment. |
| S corporation | A federal tax status available to eligible entities that make a valid election. It is not a separate LLC formation document. |
| DBA or assumed name | Registration of a business name where required. It does not create an LLC or corporation or establish their liability protections. |
| EIN | An IRS employer identification number. Obtaining one does not create a legal entity or elect S corporation status. |
Example: You organize a single-member LLC with your state. It generally defaults to disregarded-entity treatment for federal income tax. If it later qualifies for and makes an effective S corporation election, it remains an LLC under state law while its federal tax treatment changes.
Do Sole Proprietors Need to Incorporate?
A sole proprietorship generally does not require articles creating a separate entity. If you operate under a business name, you may still need a DBA or assumed-name registration. Licenses, permits, zoning requirements, and tax registrations can also apply.
Registering a name alone does not separate the business from its owner. If you want an LLC or corporation, follow the applicable state entity-filing process.
A sole proprietorship and a single-member LLC can have similar federal income-tax reporting, but they are different legal arrangements. Tax treatment alone does not tell you whether a separate legal entity exists.
Compare the Structure Before the Filing Service
| Option | Ownership and management | General federal income-tax treatment | Questions to resolve |
|---|---|---|---|
| Single-member LLC | One member; management follows state law and the operating agreement. | Generally disregarded unless corporate tax treatment is elected. An individual owner’s trade or business commonly reports on Schedule C. | What liability, licensing, banking, and ongoing state requirements apply? |
| Multi-member LLC | Two or more members; an operating agreement addresses management and economic rights. | Generally partnership treatment unless corporate tax treatment is elected; special exceptions can apply. | How will contributions, profit sharing, decisions, departures, and disputes work? |
| Corporation with C corporation treatment | Shareholders, directors, and officers, subject to applicable corporate rules. | The corporation pays income tax. Dividends can also be taxable to shareholders. | Does this fit the ownership, funding, reinvestment, and exit plans? |
| Eligible LLC or corporation with S corporation treatment | Retains its state-law structure; must satisfy S corporation eligibility rules. | Generally passes tax items through to owners, with some possible entity-level taxes. | Are the owners and economic rights eligible, and do projected benefits justify payroll and compliance costs? |
There is no universal structure that is best for every small business. Compare legal needs, ownership, expected profits, administrative costs, and state tax treatment together.
Limited liability is not an absolute shield. Personal guarantees, your own misconduct, and other circumstances can create personal exposure. Maintain appropriate insurance and respect the separation between business and personal finances.
File Directly or Use a Business Filing Service?
Direct filing: You can prepare and submit the required documents through the appropriate state agency. You pay applicable government fees and remain responsible for correct documents and follow-up requirements.
Using a service: A provider can help prepare and submit filings, organize documents, and offer additional services. You pay for that assistance, and government fees generally remain separate.
For state requirements, start with the Small Business Administration’s business-launch resources and your state’s official business-registration agency. Verify that you are using the actual government filing site before paying.
Compare Business Incorporation and LLC Filing Services
These are options to investigate, rather than a universal ranking or a claim that we have tested every provider. Confirm the current package, service agreement, and checkout total before purchasing.
| Provider | Services to consider | What to check |
|---|---|---|
| LegalZoom | LLC filing assistance, with other entity and ongoing-service options. | Basic filing and higher packages have different inclusions. EINs, operating agreements, attorney access, and bookkeeping are not included in every package. Some bundled services renew as subscriptions. |
| Bizee, formerly Incfile | Entity filing packages, registered-agent service, and additional business services. | Its entry package currently advertises a $0 service fee plus state fees. A free first year of registered-agent service is advertised with formation; review renewal charges and cancellation terms. |
| ZenBusiness | Entity filing assistance and optional compliance and business-management services. | Separate formation costs from registered-agent, compliance, financial tools, and other recurring services. One provider does not necessarily mean one all-inclusive price. |
| Northwest Registered Agent | Entity filings, registered-agent services, and business-address options. | Confirm package inclusions, renewal fees, permitted address use, and state disclosure requirements. Privacy services do not guarantee anonymity. |
| Rocket Lawyer | Business registration alongside legal-document and membership options. | Check membership eligibility, included formation benefits, consultation limits, government fees, and separate charges for EINs or registered-agent service. |
| Swyft Filings | Entity filings and optional registered-agent and compliance services. | Package processing times describe the provider’s work; state approval times are separate. Review optional services and recurring charges. |
Compare the first-year total and the ongoing annual total. A $0 service fee does not mean the business costs nothing to establish or maintain. Include state fees, registered-agent service, annual reports, licenses, state taxes, payroll, and accounting support as applicable.
Before ordering, ask:
- Which documents and services are actually included?
- Are legal or tax consultations included, limited, or separately purchased?
- Does the provider file the relevant tax election, or only create the state entity?
- Which services renew automatically, and at what regular price?
- Are government fees included in quoted compliance-service prices?
- What happens if you cancel or change your registered agent?
- What is the provider’s processing time, and what is the state’s approval time?
Your Incorporation and LLC Organization Checklist
1. Choose the State and Check Special Requirements
Start with where the business will actually operate. Organizing in another state can create additional registration, registered-agent, reporting, and fee obligations where you do business.
If you provide licensed professional services, check the licensing board and state entity rules before choosing a standard LLC or corporation. Professional entities and ownership restrictions may apply.
2. Confirm the Name and Ownership Plan
Check state name availability and required entity designations. State acceptance of a business name does not establish trademark rights. Review potential trademark conflicts separately.
Identify owners, ownership percentages, management authority, contributions, and how decisions will be made. Get professional help if ownership or economic rights are complicated.
3. Appoint a Registered Agent
A registered agent receives service of process and designated official notices. Requirements vary by state; commonly, an eligible agent must maintain an in-state physical address and be available during normal business hours.
Before appointing yourself or buying a service, confirm:
- The person or provider is eligible under the state’s rules.
- The registered office address meets state requirements.
- Someone will be available to receive documents.
- You understand which information becomes public.
- You know how documents will be delivered and monitored.
- You understand renewal costs and the process for changing agents.
Registered-agent service is different from a general mailbox, virtual office, or annual-report filing service. Confirm exactly what is included. Using an agent’s address does not automatically let you substitute it for every business address.
4. Submit the State Entity Documents
Corporations commonly file articles of incorporation; LLCs commonly file articles of organization. Some states use names such as certificate of formation. Follow the instructions for your particular state and entity.
Check names, addresses, agent information, ownership or management disclosures, and the effective date before submitting. Save the accepted documents and approval confirmation; an order receipt from a filing service is not the same as state approval.
5. Complete Internal Ownership Documents
For an LLC, establish an operating agreement appropriate to the business and state requirements. For a corporation, complete the applicable bylaws, organizational actions, and stock-issuance records.
These records help explain ownership and authority. A generic template may not address multiple owners, buyouts, unequal contributions, investor rights, or disputes.
6. Obtain an EIN When Needed
For a new LLC or corporation, complete state organization before applying for its EIN. Apply using the correct legal name and responsible-party information.
Get an EIN directly from the IRS at no charge. A filing service may charge to handle the application for you; that is an assistance fee, not an IRS application fee.
An EIN does not replace state approval, licenses, tax registrations, or a tax election.
7. Address Tax Elections and Registrations
Confirm the default tax treatment and whether an election is appropriate. An S corporation election generally uses Form 2553. An eligible LLC making a timely, valid S election generally does not need a separate Form 8832 solely to elect corporate classification for that same effective date.
Form 2553 is generally due no later than two months and 15 days after the beginning of the tax year for which the election is intended, or during the preceding tax year. New entities and late elections require careful attention to the instructions. Check state recognition and separate election requirements as well.
Review the IRS Form 2553 instructions. Keep proof of submission and the IRS acceptance notice; state formation approval does not establish federal S corporation status.
S corporation treatment requires eligible owners and ownership rights. Working shareholder-officers generally must receive reasonable compensation for services before nonwage distributions. Compare potential benefits with payroll, tax-return, bookkeeping, and state costs.
Set up applicable sales-tax, employer, unemployment, and other registrations separately. Filing articles does not automatically complete these steps.
8. Set Up Banking, Records, and Operating Requirements
Open the appropriate business accounts, record owner contributions, and establish reliable bookkeeping. Keep business and personal spending separate.
Review licenses, permits, insurance, contracts, and local requirements before operating. If moving an existing business into a new entity, address transfers of assets, contracts, registrations, and obligations rather than assuming the new filing transfers everything automatically.
See our DIY Bookkeeping guide for the next steps in organizing your financial records.
Keep the Business in Good Standing
| Responsibility | What to monitor |
|---|---|
| State reports | Annual, biennial, initial, or other reports required for your state and entity. |
| Registered agent | Continuous eligible representation and current contact information. |
| Taxes and returns | Federal and state income-tax filings, applicable franchise or other entity taxes, payroll, and sales tax. |
| Licenses and permits | Required renewals and changes in activities or locations. |
| Ownership and governance | Contributions, equity transfers, approvals, and required internal records. |
| Additional states | Whether activities require registration to do business elsewhere. |
| Closing the business | Formal dissolution or withdrawal and final tax and reporting obligations. |
Maintain a calendar using verified deadlines for your state, entity, and tax year. Provider reminders are helpful, but they do not automatically satisfy filing obligations. A dormant business may still have required filings until properly closed.
Check Current Beneficial Ownership Reporting Rules
Under current FinCEN rules, entities created in the United States are exempt from federal beneficial ownership information reporting under the Corporate Transparency Act. Certain entities formed under foreign-country law and registered to do business in the United States may still have reporting obligations.
Check FinCEN’s official BOI guidance before acting on an older checklist or purchasing a BOI filing service. This federal exemption does not eliminate separate state filings, tax obligations, or ownership information requested by banks.
When Professional Guidance Is Worthwhile
Get legal or tax help before filing when you have multiple owners, custom profit-sharing, investors, licensed professional services, foreign owners, multistate operations, or significant assets to transfer.
An attorney can address ownership agreements, governance, contracts, and legal exposure. A tax professional can evaluate elections, compensation, tax reporting, and the cost of maintaining the proposed structure.
A filing provider can handle paperwork within its service scope. Confirm separately whether it provides the individualized advice your situation requires.
Your Next Step
Write down who will own the business, where it will operate, how it will be managed, and which legal and tax questions remain. Then compare direct filing with the services above using the full initial and ongoing costs.
Once approved, finish the ownership documents, banking, tax registrations, and compliance calendar. A good start includes both the filing and a workable plan for what comes afterward.
Official Resources
- IRS: Limited Liability Companies
- IRS: S Corporations
- IRS: S Corporation Compensation
- IRS: Forming a Corporation
This guide focuses on U.S. for-profit LLCs and corporations and provides general educational information. Requirements vary by state, business activity, ownership, and tax circumstances.
Reviewed October 5, 2026. Provider packages, prices, and government requirements can change; confirm current terms and official instructions before filing.