ContractsCounsel Logo

Incorporation in the USA

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 7,581 reviews
Home Blog Incorporation in the USA

Jump to Section

Need help forming a corporation?

Create a free project posting

Incorporation in the USA is the process of creating a legal entity called a corporation in this country that deals with different products and services. The process helps provide the specific business entity with limited liability protection by separating the owner’s assets from debts and liabilities. Let us learn more about the important aspects of incorporation in USA below.

Steps for Incorporation in the USA

One must follow several steps to incorporate any business in the United States. Yet, the most common steps to be followed during the process are discussed below.

  1. Decide on a Business Name. Select a distinguishable name for the corporation that does not match any other entity’s name. It helps ensure that the organization complies with the state's rules where the owner plans to incorporate the same.
  2. Choose a State of Incorporation. Decide which state is most favorable for the new business. Consider factors like taxes, regulations, and the business environment.
  3. Appoint Important People. Choose individuals who can serve as directors and officers of the new corporation. Directors are responsible for major decisions. The officers come next on the list who handle day-to-day operations.
  4. File Articles of Incorporation. Prepare and submit the legal documents with the designated state authorities. This document contains essential information about the corporation. The same may involve its name, address, purpose, and number of authorized shares.
  5. Create Corporate Bylaws. Draft corporate bylaws which outline the internal rules and regulations governing the corporation's operations. The clause includes the roles and responsibilities of directors and officers, meeting procedures, and other shareholder rights.
  6. Issue Stock. Decide on the number of shares to be issued. After that, distribute stock certificates to shareholders who invest in the corporation.
  7. Open a Bank Account. Establish a business bank account for financial transactions. It will also help keep personal and business finances separate for future requirements.
  8. Arrange an Initial Board Meeting. Conduct an initial board meeting to approve bylaws and appoint officers. Then issue the stock and address other essential matters.
  9. Accomplish Ongoing Requirements. Stay compliant with state regulations and reporting requirements. Be sure to file annual reports and pay taxes on time.

Benefits of Incorporation in the USA

Business incorporation in the United States can benefit the respective owners. Here’s how the entire process proves to be advantageous eventually:

  • Providing Limited Liability Protection: A business incorporation protects the owners (shareholders) and directors. This means that personal assets often remain protected from debts and liabilities. If the business faces legal actions or financial difficulties, shareholders' assets are not at risk.
  • Maintaining a Separate Legal Entity: A corporation remains separate from its owners. It can enter into contracts and further conduct business in its name. This distinction allows for business continuity even if ownership changes, offering stability and longevity.
  • Lending Enhanced Credibility: Incorporation often lends credibility and a professional image to the business. Customers, suppliers, and investors may perceive incorporated entities as more reliable and trustworthy, which can lead to increased business opportunities.
  • Granting Access to Capital: Corporations can raise more capital than other business structures. They can issue stocks and attract investors, making funding expansion, research, and development easier.
  • Enabling Tax Advantages: Corporations may benefit from certain tax deductions and credits not available to other business types despite the different tax situations depending on the specific circumstances. A few others may be an S corporation which provides more tax advantages to respective shareholders.
  • Allowing Transfer of Ownership: One can transfer or sell such shares to other parties efficiently because of the ownership aspect. It assists in facilitating changes in ownership structure when needed.
  • Offering Employee Benefits: Corporations can also offer some attractive employee benefits. Employees can rely on organizations for better retirement, stock options, and health insurance plans. Such instances make them more appealing to potential employees.
  • Facilitating Perpetual Existence: A corporation continues to exist even if the ownership or management changes. So, it offers stability and long-term planning opportunities.
  • Improving Public Perception: Being a corporation can improve the public's perception of the business. It is because the entity implies a higher level of professionalism, stability, and compliance with regulations.
  • Giving Legal Protection: Corporations may have additional legal protections in certain situations. They take care of one’s intellectual property rights which can safeguard the company's innovations and assets.
Meet some lawyers on our platform

Morgan S.

6 projects on CC
View Profile

Justin K.

29 projects on CC
View Profile

Zachary J.

191 projects on CC
View Profile

Wendy C.

37 projects on CC
View Profile

Considerations to Engage a Lawyer for Incorporation in the USA

Approaching a lawyer for incorporation in the USA is vital to ensure a smooth and legally compliant process. Here are some important considerations when seeking legal assistance for incorporation:

  • Expertise in Business Law: Look for a lawyer who knows business and corporate law. They should also have experience in handling incorporations. The attorney must be familiar with the legal requirements in the state where there is a plan to incorporate the entity.
  • Referrals and Recommendations: Seek recommendations from trusted sources, such as other business owners, entrepreneurs, or professional networks. Referrals can help you find a reliable and reputable lawyer.
  • Initial Consultation: Schedule a consultation with the lawyer beforehand to discuss all business goals and requirements. Try discussing any specific concerns that may come up owing to the new venture. This meeting will help assess their expertise and determine if they fit the present business needs.
  • Legal Structure and Entity Type: The lawyer should advise on the business's most suitable legal structure and entity type. The attorney can help decide whether it is a corporation, LLC (Limited Liability Company), or other business entity.
  • State-Specific Requirements: Each state has its incorporation laws and regulations. Ensure that the lawyer is well-versed in the state's requirements where there is a plan to incorporate.
  • Document Preparation and Filing: A competent lawyer will assist in preparing and filing all necessary documents for incorporation, including the Articles of Incorporation and other essential paperwork.
  • Compliance and Tax Considerations: The lawyer should guide everyone on legal compliance issues. The professional must know about obtaining necessary licenses and permits and help the clients understand the tax implications of the chosen business structure.
  • Shareholder Agreements and Bylaws: If one is incorporating with partners, the lawyer can help draft shareholder agreements and corporate bylaws to govern the internal workings of the corporation.

Key Terms for Incorporation in the USA

  • C Corporation: A legal entity separately taxed from its owners and offers unlimited growth potential and access to public capital markets.
  • S Corporation: An entity that elects a special tax status with the IRS, which allows income to "pass through" to shareholders' tax returns to avoid double taxation.
  • Board of Directors: A group of individuals that shareholders elect to oversee the corporation's management and make major decisions on behalf of the company.
  • Registered Office: The physical address where legal and official documents are delivered. It is where the corporation maintains its business records as the state requires.
  • Shareholders: Individuals or entities that own shares of the corporation and have ownership rights and voting privileges.

Final Thoughts on Incorporation in the USA

Incorporating a business in the USA is a prudent decision that offers numerous benefits to entrepreneurs and business owners. From limited liability protection and enhanced credibility to greater access to capital and tax advantages, incorporation provides a solid legal framework for businesses to thrive and expand. By seeking legal guidance and ensuring compliance with state-specific requirements, entrepreneurs can navigate the incorporation process smoothly and set their businesses toward success, growth, and long-term stability in the dynamic and competitive American market.

If you want free pricing proposals from vetted lawyers that are 60% less than typical law firms, click here to get started. By comparing multiple proposals for free, you can save the time and stress of finding a quality lawyer for your business needs.

Need help forming a corporation?

Create a free project posting

Meet some of our Lawyers

Morgan S. on ContractsCounsel
View Morgan
5.0 (5)
Member Since:
July 31, 2023

Morgan S.

Free Consultation
Austin, Texas
2 Yrs Experience
Licensed in TX, WV
University of Pittsburgh Law School

Corporate Attorney that represents startups, businesses, investors, VC/PE doing business throughout the country. Representing in a range of matters from formation to regulatory compliance to financings to exit. Have a practice that represents both domestic and foreign startups, businesses, and entrepreneurs. Along with VC, Private Equity, and investors.

Andre T. on ContractsCounsel
View Andre
Member Since:
September 6, 2023

Andre T.

Free Consultation
30 Yrs Experience
Licensed in IL, MO
University of Missouri - Columbia

Commercial Litigation attorney providing advice and counsel to management regarding employment related matters and risk management issues

Christopher L. on ContractsCounsel
View Christopher
Member Since:
September 6, 2023

Christopher L.

Business Lawyer
Free Consultation
Minneapolis, MN, United States
12 Yrs Experience
Licensed in MN
New England School of Law

I have worked in banking, financial technology and technology as a legal and compliance executive who negotiates and drafts contracts, ensures products and services comply with applicable regulations, implements policies and procedures, oversees litigation, and manages corporate governance programs.

Kim G. on ContractsCounsel
View Kim
Member Since:
September 6, 2023

Kim G.

Business Lawyer
Free Consultation
26 Yrs Experience
Licensed in FL
Florida State University College of Law

Attorney and mediator with extensive experience in negotiating, drafting, and managing contracts in the private, public, and nonprofit sectors.

Michael C. on ContractsCounsel
View Michael
Member Since:
September 6, 2023

Michael C.

self employed
Free Consultation
Sacramento area
42 Yrs Experience
Licensed in CA
Lincoln School of Law

40+ years handling litigation matters for employers and employees, defense and prosecution of personal injury matters, CalOsha defense, prepare employment contracts, non-compete clauses, established drug policies and franchise agreements. represented banks in commercial litigation , asset retrieval matters. conducted audits of insurance company claims on behalf of employers, defended contractors in toxic tort cases, handled appeals to the insurance commissioner on workers compensation rate classification matters

Christian D. on ContractsCounsel
View Christian
Member Since:
September 6, 2023

Christian D.

General Practice Attorney
Free Consultation
Austin, Texas
10 Yrs Experience
Licensed in TX
St. Mary's University - School of Law

Christian Davila received his Juris Doctorate from St. Mary’s University and becoming a member of the State Bar of Texas in 2013. Before law school, he studied at Texas A&M International University (TAMIU), and participated in multiple programs across various fields of study, including the University of Texas Medical Branch-School of Medicine’s “Early Medical School Acceptance Program,” and the Hispanic Association of Colleges & Universities’ “National Internship Program” at the Library of Congress in Washington, D.C. Christian’s legal experience includes criminal law (both prosecution and defense), family law, transactional law, business litigation, real estate litigation, and general civil litigation. Christian was previously in-house counsel for a multi-million dollar apartment construction and management company, handling all property acquisition, document drafting, negotiations, and litigation. Christian is a former member of the American Association for Justice (formerly the Association of Trial Lawyers of America), and he has been distinguished by the National Trial Lawyers as one of their TOP 40 Civil Plaintiff attorneys in Texas UNDER 40 years old. He likes weightlifting, reading comicbooks, and being silly with his kids in his spare time.

Kahlee S. on ContractsCounsel
View Kahlee
Member Since:
September 6, 2023

Kahlee S.

Managing Partner
Free Consultation
Mount Dora, Florida
2 Yrs Experience
Licensed in FL
Barry University Dwayne O. Andreas School of Law

I opened Hestia Legal when I was 6 months pregnant with the focus on educating and assisting families in my community. While the majority of my practice revolves around Estate Planning, I have a history of experience with contract and general business agreement drafting, discovery drafting, and general litigation document drafting.

Find the best lawyer for your project

Browse Lawyers Now
Learn About Contracts
See More Contracts
other helpful articles

Need help forming a corporation?

Create a free project posting

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city