Incorporate Your Business

BizFilings is the online incorporation provider of choice for more than 500,000 small businesses. BizFilings' expert staff, step-by-step processes, and no hidden fees policy allow you to incorporate, obtain business licenses, Federal Tax IDs and more.

The Benefits of Incorporation

Whether you’re just considering a new business idea or already act as a sole proprietorship or general partnership, you may wonder if incorporating your business is right for you. Discover why the benefits of incorporation can outweigh any downsides.

The pros

Secure your assets, gain tax breaks. Corporation owners enjoy limited liability protection, and are typically not personally responsible for business debts. So creditors can’t pursue your home or car to pay business debts. Another plus: corporations often gain tax advantages, writing off such things as health insurance premiums, savings on self-employment taxes, and life insurance.
Grow your corporation for now—and the future. Incorporating bolsters credibility, and may help you reach potential new customers and partners. And while you can’t live forever—your corporation can. Even if an owner dies or sells interest, the corporation still exists.
Easy transfer and faster funds. Corporation ownership can be easily transferable (with some restrictions on S corporations). Capital can be raised more easily through the sale of stock. Another advantage is that many banks prefer handling loans with incorporated borrowers.
Ready for retirement. Retirement funds and qualified plans, like a 401(k), can be easier to establish.

The cons

Corporations do have some potential disadvantages, including:

Double taxation. C corporations are subject to double taxation of corporate profits when income is distributed as dividends. This can be avoided by electing S corporation tax status with the IRS.
Ongoing fees. You must file articles of incorporation with the state, plus applicable fees. Many states impose ongoing fees—which are steeper for a corporation than for a sole proprietorship or general partnership.
More record keeping. Corporations must follow initial and annual record-keeping requirements—which sole proprietorships, general partnerships and limited liability companies (LLCs) avoid.

Take a look at S Corporations
A subchapter S corporation is a standard corporation that has elected a special tax status with the Internal Revenue Service (IRS). S corporations carry the same benefits as C corporations, such protecting the shareholders’ (or owners’) personal assets from the debts and liabilities of the business, unlimited life and tax deductibility of certain business expenses. The primary differences between S corporations and C corporations are the way they are taxed and also the ownership restrictions S corporations face.

When deciding which entity structure is most appropriate for their business, small business owners often view the potential double taxation of profits associated with C corporations as the primary disadvantage to forming a standard corporation. With C corporations, the profits are taxed first at the corporate level, and then taxed again at the individual level if they are distributed to shareholders in the form of dividends. Shareholders must report dividends as personal income and pay taxes on that income.

Double taxation can be eliminated by completing the S corporation election with the IRS. S corporations are taxed as pass-through taxation entities, similar to general partnerships and most limited liability companies. While the profits of an S corporation are reported at the corporate level, taxes are not paid at the corporate level. Instead, the profits are passed-through to the individual tax returns of the shareholders and are taxed at the individual rate. If the S corporation reports a loss, the amount of the loss is also passed-through and reported on tax returns of the shareholders.

Keep in mind, not all C corporations can make the S corporation election with the IRS, as the IRS has placed restrictions on S corporations. Current restrictions include:

Shareholders must number fewer than 75, and all shareholders must consent in writing to the S corporation election.
Shareholders must be individuals, estates, or certain qualified trusts.
Shareholders cannot be non-resident aliens.
S corporations can have only one class of stock(disregarding voting rights).

To be classified as an S corporation, a corporation must make a timely filing of Form 2553 with the IRS. IRS instructions indicate that the form must be completed and filed:

At any time before the 16th day of the 3rd month of the tax year if filed during the tax year the election is to take effect, or
At any time during the preceding tax year. An election made no later than 2 months and 15 days after the beginning of a tax year that is less than 2 ½ months long is treated as timely made for that tax year.

An election made after the 15th day of the 3rd month but before the end of the tax year is effective for the next year. For example, if a calendar tax year corporation makes the election in April 2005, it is effective for the corporation’s 2005 calendar tax year.

For questions on whether the S corporation structure is best for your particular business, it is best to seek the advice of an attorney or accountant.

Registered Agent Services

Virtually all states require corporations and LLCs to appoint a registered agent in the state where the company is formed. The registered agent is responsible for receiving important legal and tax documents including: notice of litigation (service of process), franchise tax forms and annual report forms.

The registered agent may be an individual or a company approved by the state to act as agent, located at a street address in the state where the company is formed. The registered agent’s name and address are included on the formation documents. This information is a matter of public record, meaning that anyone has access to it.

Benefits of Using a Registered Agent Provider
Registered agent providers, such as BizFilings, are companies that act as registered agent for many businesses. These companies understand the important role the registered agent plays, and strive to provide excellent service for your business. Benefits of using BizFilings as your company’s registered agent include:

Stability - If you move locations, you do not have to worry about changing your registered agent address with the state. If you act as your own registered agent and move, you must amend your formation documents with the state to update this address, and pay the necessary amendment filing fees.
Anonymity - The registered agent name and address is of public record. With BizFilings as your registered agent, our address will be listed in public documents for anyone to access.
Reliability – With BizFilings’ service, we provide real-time notice of litigation to you, and forward all official state documents and franchise tax notices.
Convenience - Access your registered agent account 24-hours a day via our secure Online Corporate Status Center.
Professionalism - Many corporations and LLCs use a separate company as registered agent; however, the professionalism of BizFilings’ registered agent team ensures that your company’s important documents are handled with the utmost speed and reliability.
Accountability - Some providers offer a limited service for a hefty fee. When choosing BizFilings, you not only receive exceptional registered agent service, you also receive BizComply, our online compliance management tool, at no extra charge. We understand the challenges involved with starting and growing a business, and believe that this great product can assist you throughout the life of your business.

BizFilings operates through a company-owned, national network of registered agent offices. This allows us to deliver consistent registered agent service and provide exceptional customer service and support. As your registered agent, we will:

Accept any legal service of process (notice of litigation) document, record the service in your company file, scan the document into the BizFilings Online Corporate Status Center, and ship the service of process to you via overnight delivery.
Notify you via telephone and/or email upon receipt of service of process.
Forward any official documents and tax notices received from the Secretary of State/Department of State.
Provide you with 24/7 secure access to your registered agent account via BizFilings’ Online Corporate Status Center.
Provide 24/7 access to BizComply, our online compliance management service.

As your registered agent, BizFilings is responsible for statutory regulations, ensuring that your company remains compliant with government regulations in any state. However, unlike other incorporation and registered agent providers, we also offer BizComply as an added value, at no charge to you.

BizFilings includes six months free of registered agent service with all formation and foreign qualification services. The cost thereafter is $129/year. If you already have a registered agent and wish to change your agent to BizFilings, that cost is also $129, which includes the change of agent with the state and the first year of service. The cost thereafter is $129/year. If you are filing your own documents with the state or your attorney is filing them for you, but need to name a registered agent, you can take advantage of our registered agent only service for $129/year.

To access our formation order form, click here. To access our registered agent only and change of registered agent order form, click here.

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