Have a question? We have answers.
Why should I incorporate?
The number one reason to incorporate is personal asset protection, and trust us, that’s no small thing. Forming a corporation or LLC will allow you and your business to become separate entities, which—as long as you maintain corporate compliance—helps protect your personal assets from your business’s debts and liabilities. This means, for example, that if your company loses a lawsuit, your home and other personal assets can’t be taken to pay the judgement.
Incorporating can also help you raise capital, establish credit, compete for contracts, increase your company’s credibility, offer perpetual existence, and more. But let’s be real, we had you at personal asset protection, didn’t we?
Should I incorporate in Delaware?
Well…we don’t know your specific circumstances, but generally speaking, most small businesses are better off filing in whichever state their business is actually located. If you incorporate in Delaware, you’ll still have to register to conduct business in your own state, maintain a second registered agent there—and most importantly—be responsible for complying with the varying laws, taxes, licensing, and ongoing filing requirements of two states instead of one.
Delaware has some welcoming advantages for large, multi-state businesses, but for the vast majority of small business owners, the cons may outweigh the pros.
LLC, S Corp, or C Corp...which entity type should I choose for my business?
Choosing the right entity type is an important decision that can affect your taxes, future business requirements, and more. LLCs are the most popular choice for small businesses these days, but it's important to remember that they have pros and cons just like C and S Corps. If you're not sure which entity type is right for you, Mr. Simple Chart may be able to make this complicated decision a little simpler. We also break down some of the differences here. If you're still unsure about which entity type is best for your particular business, you may want to consult with a tax professional before filing.
How much does it cost to form an LLC or corporation?
We have three package tiers to meet your every need…
Pretty Great: $49 plus state fees
Really Great: $149 plus state fees
Legendary: $249 plus state fees
State fees can vary depending on state, entity type, and turnaround time, so check out our pricing and packages page to get the specific pricing details for your company and learn more about what our packages have to offer.
What is a registered agent?
An individual or entity appointed to receive official, time-sensitive court notices for a business if they’re ever a party in a legal action, such as a lawsuit or court summons. Delivery of these notices is called service of process (SOP).
Corporations and LLCs in every state are required to have a registered agent on file. Failing to maintain an active registered agent with a valid, physical address may result in penalties, and suspension—or even involuntary dissolution—of your company.
Can I act as my own registered agent?
If you can meet the requirements to be a registered agent, yes—though you may not want to.
Your registered agent is required to have a current, physical address in the state where your business is located and always be available at that address to receive court notices during normal business hours, Monday-Friday, year-round. That means no leaving the office during the day for off-site business meetings, errands, personal appointments, vacations, etc. That’s a hefty, time-consuming responsibility.
Failure to be available to receive these notices can result in losing a lawsuit by default, penalties, suspension, and more. For this, and many other reasons, hiring an experienced, professional registered agent may be your best bet. Luckily, all of our filing packages come with one year of free registered agent services!
Why is compliance important?
If protecting your personal assets and maintaining your business's existence are important to you (and we're guessing they're pretty high on your list of important things), then compliance should be just as important, because they all go hand in hand.
For example, in some states, delinquent annual filings can ultimately result in penalties and administrative dissolution of your business. In addition to the cost and effort of re-filing, while you're administratively dissolved, your business name would be up for grabs and contracts you sign may not be recognized or upheld in the court system.
Just in case all that isn’t scary enough, here’s another example. Let’s say your corporation fails to hold annual meetings and keep meeting “minutes” or records, what happens? Well, if you get sued or your company files bankruptcy, you run the risk of a court piercing your "corporate veil," which is the legal term for removing your limited liability protection. That's the last thing you want, because that makes your personal assets (home, savings, etc.) fair game in the settlement of your business's debts and liabilities.
We could go on, but do we really need to? Our advice, don’t mess around with compliance—it's important stuff.
Are there any ongoing filing requirements for my business?
Most states require annual or biennial reports of some kind, each with their own due dates. In order for your entity to maintain good standing (and to avoid hefty penalties and reinstatement fees), it’s important that you stay on top of these filings, especially since many state filing offices no longer send reminders.
Not to worry though, IncBig offers a Managed Annual Report Service (MARS) so you don’t need to stress about knowing what forms are required, when those forms are due, and where to file them. Not to mention staying on top of changes from year to year. With MARS, the most you’ll need to worry about is providing the occasional signature. Get the details on this service here.
How long will my company exist?
This all depends on your company, where you’re located, and what you decide. C Corps and S Corps have a perpetual (ongoing) existence that will not cease to exist if an owner dies or leaves.
In the case of an LLC, existence is usually determined based on what you specify in your operating agreement, though the articles of organization in some states may also ask if existence will be perpetual or not. If you don't have an operating agreement laying out your wishes, the future of the LLC may be in question if an owner dies or leaves.
What is a compliance kit...and do I need one?
Whether you have an LLC or a corporation, a compliance kit is a smart place to store all of your important business documents. If your company is being audited, sued, or sold, one of the first things banks, lenders, and lawyers will request is your compliance kit. Why? Because it's traditionally where they should be able to find a lot of the information they need to show that your business is maintaining its compliance.
What will my bank require when I open a company account?
Each bank can have different requirements for opening a business account, but common requirements can include a copy of company formation documents, a federal Employer Identification Number (EIN), and a banking resolution.
What is a banking resolution?
A banking resolution is a legal document stating that the major players of your business have resolved to establish a bank account and who has authority to open and operate the account on its behalf. A banking resolution can help make opening your bank account hassle-free...or at least as hassle-free as a trip to the bank can be.