Q:

How do you create a corporation?

A:

Quick Answer

Creating a corporation requires creating a corporation name and registering that name with a state government. Most state governments require filing a form called articles of incorporation and other business permits and licenses may be necessary, notes the United States Small Business Administration (SBA).

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Full Answer

In order to be considered a corporation, a business must be owned by shareholders. Corporation laws vary by state, but, as the SBA notes, a corporation must register with the IRS and with state and local governments.

  1. Establish a business name
  2. Establishing a business name is the first step in developing a corporation. Register the business name with the state government and at this time, develop a trade name or assumed name, if desired. Be sure to include a corporate designation, such as "Incorporated" or Limited," in the business name.

  3. File the paperwork
  4. Once a name has been determined, register the business as a corporation with the state. States have different registration requirements, so check with the state government for more information.

  5. Register with the IRS
  6. All corporations have to pay federal and state taxes. Register the business with the federal, state and local tax agencies. These agencies will provide a tax identification number. Remember that employees that are shareholders must pay taxes on their income.

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