Filing articles of incorporation represents a straightforward process that typically takes only a few minutes. The greater difficulty rests in the surrounding decisions: selecting the appropriate state, authorizing the correct number of shares, meeting unpublicized deadlines, and retaining the corporation’s good standing over time.

Most resources on forming a corporation conclude with filing articles and obtaining an EIN. In practice, this is only the beginning. This article addresses the entire process, including the steps that often arise later during fundraising, bank reviews, or legal due diligence.

What You Need Before You Start

Have these ready before you file:

• The legal name you want, plus one or two backups

• A state of incorporation

• A registered agent with a physical address in that state

• Names and addresses of your incorporator and initial directors

• A share structure: how many shares to authorize and their par value

• An ownership plan: who gets how much stock, and whether founder shares will vest

If you haven't decided between an LLC and a corporation yet, settle that first. A corporation makes the most sense if you plan to raise venture capital, issue stock options, or eventually go public.

Step 1: Choose Your State of Incorporation

Choosing the state of incorporation is one of the most significant decisions in the formation process, yet it is often given insufficient consideration.

Your home state is usually the right answer for a closely held business that operates in one state. You file once, pay one set of fees, and deal with one Secretary of State.

Delaware remains the default for venture-backed startups. That is because of its corporate case law, its specialized Court of Chancery, and the fact that investors and their lawyers expect it. Delaware amended its corporate law in 2025 through SB 21, and the state's Supreme Court upheld the law in February 2026.

Nevada and Texas are now serious contenders for founder-controlled companies. After SB 21 passed, Nevada and Texas moved quickly to pass their own corporate law reforms to attract businesses. The shift shows up in the data: Delaware's share of US IPOs, historically ranging from 80% to 93%, fell to about 62% in 2025, with Nevada at roughly 17% and Texas at roughly 4%.

A common misconception is that incorporating outside your primary state of operations exempts you from that state’s requirements. For example, a Delaware corporation with operations in California must also register as a foreign corporation in California. This results in duplicate fees, annual filings, and registered agent requirements.

In California, this also triggers the state’s $800 minimum annual franchise tax, which applies regardless of profitability. Newly incorporated or qualified corporations are exempt in their first taxable year, but the tax is assessed annually thereafter until formal dissolution. It is essential to budget for compliance costs in both states from the outset.

A practical rule of thumb:

• Raising institutional capital: Delaware, until your lawyer tells you otherwise.

• Controlled by founders, headquartered in Texas or Nevada, and not raising VC: it is worth a real conversation about Texas or Nevada.

• A local business with no investors: your home state.

Step 2: Check and Reserve Your Corporate Name

Search your state's business entity database to confirm the name is available. Most states require a corporate designator such as "Inc.," "Corporation," or "Corp." They also restrict expressions like "Bank" or "Insurance" without regulatory approval.

Two checks founders skip:

1. Trademark conflicts. State name approval doesn't protect you from a federal trademark claim. Run a quick USPTO search.

2. Name availability in every state you'll operate in. If your name is taken in a state where you later need to qualify as a foreign entity, you'll have to operate there under an assumed name.

If you aren't filing right away, most states let you reserve a name for a fee.

Step 3: Appoint a Registered Agent

Every corporation needs a registered agent in its state of incorporation, and in every state where it registers as a foreign corporation. The agent receives service of process, meaning lawsuits and subpoenas, as well as official state notices.

You can serve as your own agent in your home state. Most growing companies don't, for three reasons:

• Your address becomes public record.

• Someone must be available at that address during business hours.

• A missed lawsuit can lead to a default judgment.

For multi-state businesses, a single registered agent service across all states is far easier to manage than separate providers in each state. If you ever need to switch providers, follow a gap-free registered agent change process.

Step 4: Decide Your Share Structure

Determining your share structure establishes both your capitalization table and future tax obligations. This decision calls for careful consideration beyond default settings.

Authorized shares are the maximum number of shares the corporation can issue. Startups commonly authorize around 10,000,000 shares and issue most of them to founders at a tiny par value, such as $0.00001. That leaves room for an option pool and future investors without an amendment.

The Delaware franchise tax trap: Delaware lets you calculate franchise tax two ways.

• Authorized Shares Method: the minimum tax is $175, and it climbs as you authorize more shares.

• Assumed Par Value Capital Method: the tax is based on your issued shares and total gross assets, with a $400 minimum.

Delaware defaults to the first method; for a corporation with 10,000,000 authorized shares that produces $85,165: $250 on the first 10,000 shares, plus $85 for each additional block of 10,000 shares.

Each year, many founders are surprised by a substantial franchise tax notice. Recalculating the tax using the assumed par value method typically reduces the amount owed to a few hundred or a few thousand dollars, depending on the company’s gross assets. The initial notice is not the final bill; always recalculate before remitting payment.

Step 5: File Your Articles of Incorporation

This document creates the corporation. Depending on the state, it is called "articles of incorporation" or a "certificate of incorporation." It typically includes:

• Corporate name

• Registered agent and registered office address

• Number of authorized shares, their classes, and par value

• Incorporator name and signature

• The corporation's purpose (a general "any lawful purpose" clause is standard)

• Sometimes, initial directors

Ownership requirements are simpler than many people expect: no state requires a corporation to have more than one owner, and a sole owner can prepare, sign, and file the articles personally.

Filing fees vary widely by state. Most states offer online filing, and many offer accelerated processing if you need the entity set up quickly for a contract or funding round.

Order a certified copy while you're filing, as banks and some agencies require it. When you qualify as a foreign corporation, most states will also require a recent certificate of good standing from your state of formation.

Step 6: Hold the Organizational Meeting

State approval makes the corporation exist. It doesn't make it function. The organizational meeting, often held by unanimous written consent rather than in person, is where the corporation is formally established. At this meeting, the incorporator or initial board:

• Adopts bylaws, the internal rules for meetings, voting, quorum, and officer duties

• Confirms directors and elects officers: typically a CEO or President, a Secretary and a Treasurer, and in most states one person can hold several roles

• Authorizes the issuance of founder stock under stock purchase agreements, usually with a vesting schedule and cliff

• Approves opening a bank account and ratifies anything the incorporator did before formation

• Sets the fiscal year

A typical issue arises when founders form the corporation but do not document the issuance of stock. During subsequent financing or due diligence, the absence of board consent, executed stock purchase agreements, and a stock ledger becomes apparent. Rectifying these omissions retroactively is costly and may result in tax complications. It is critical to complete this documentation at the outset.

Step 7: File Your 83(b) Election Within 30 Days

If founder shares are subject to vesting, which investors will expect, each founder should consider an 83(b) election. It lets you pay tax on the stock's value now, when it is worth almost nothing, rather than when the shares vest and potentially rise in value.

This deadline is among the strictest in the formation process. The 83(b) election must be filed within 30 days of the equity transfer, with very limited exceptions.

Filing is easier than it used to be. Form 15620 can now be submitted online, which is the IRS's preferred method, and you can download a confirmation copy right away. You must still give a copy of the filed election to the company. Keep your confirmation with your permanent equity records.

Step 8: Get Your EIN and Open a Business Bank Account

Apply for an Employer Identification Number directly with the IRS. The EIN itself is free, so be wary of websites that charge for it.

• With an SSN or ITIN: if the responsible party has either, you can usually get an EIN instantly online.

• Without an SSN or ITIN, non-US founders can file Form SS-4 by fax, which generally takes about 4 business days, or by mail, which takes about 4 weeks.

• Principal place of business outside the US: you can also call the IRS international EIN line and receive the number during the call.

Next, open a business bank account in the corporation’s name. It is essential to maintain a clear separation between business and personal funds. Commingling assets is a primary reason courts may disregard the corporate entity and impose personal liability on owners, a process known as piercing the corporate veil.

Step 9: Choose Your Tax Treatment

Every corporation is a C corporation by default. If you qualify and flow-through taxation makes sense, you can elect S corporation status by filing IRS Form 2553.

The deadline is no later than 2 months and 15 days after the start of the tax year the election should apply to. You can also file at any time during the preceding tax year.

S corp status has real limits:

• No more than 100 shareholders

• Only one class of stock

• Shareholders must be US citizens or residents, estates, or certain trusts, which rules out partnerships, corporations, and nonresident aliens

If the deadline is missed, the S corporation election generally becomes effective the following year, although the IRS may grant late-election relief in certain circumstances. Startups intending to raise venture capital should remain C corporations. Consult a qualified tax advisor before making this election.

Step 10: Register for State Taxes, Licenses and Permits

Formation doesn't authorize you to operate. Depending on what you do and where you do it, you may need:

• State tax accounts (sales tax, payroll withholding, unemployment insurance)

• General business licenses at the city or county level

• Industry-specific permits

• Foreign qualification in every state where you're "doing business," which usually means employees, an office, or significant physical presence

Operating across several states quickly multiplies all of this. Our guide to filing business taxes in multiple states covers the tax side. For licenses, a license and permit management platform prevents renewals from falling through the gaps in spreadsheets.

Step 11: Confirm Your Federal Reporting Obligations (BOI Update)

Many formation guides still tell new corporations to file a beneficial ownership information report with FinCEN. That guidance is now outdated for US companies.

FinCEN issued a final rule that permanently removes BOI reporting under the Corporate Transparency Act for US companies and US persons. The rule took effect August 14, 2026.

The exception is foreign companies. Foreign entities registered to do business in the US must still report beneficial ownership information for their foreign owners. If a non-US parent registers in a US state, check whether it has a filing obligation.

Step 12: Build Your Compliance Calendar

This step is critical to retaining your corporation’s good standing. Following formation, you will have continuous compliance obligations, including:

• Annual or biennial reports in your formation state and every foreign-qualified state, each having its own due date

• Franchise taxes. Delaware's are due by March 1 each year. Missing that date triggers a $200 penalty plus 1.5% monthly interest on unpaid tax.

• Registered agent renewals

• License and permit renewals

• Board and shareholder meeting minutes

• Business insurance for general liability, workers' compensation, and any state-mandated coverage

Miss an annual report, and most states eventually mark the corporation "not in good standing." That blocks you from obtaining a certificate of good standing, which banks, landlords, and investors routinely require. Missing more filings can lead to administrative dissolution.

For a single entity in one state, a calendar reminder may suffice. However, managing multiple entities across several states requires a more solid solution. Entity management software centralizes records, tracks filing deadlines, and ensures annual reports are submitted before penalties are incurred.

Forming Entities Outside the US

If you're expanding internationally, the same logic applies with more variables. Legal forms, capital requirements, local director rules, and filing calendars differ by country. Before forming abroad, decide whether you need a full subsidiary or whether a branch or employer-of-record arrangement will do. Also plan the exit early, because closing a foreign entity can take longer than forming one.

Our comparison of EU entity types (GmbH, SAS, BV and OÜ) is a good starting point. When an entity reaches the end of its life, see our guide on how to dissolve a corporation.

Common Mistakes to Avoid

1. Incorporating in Delaware by default when you're a local business with no investors, and then paying double fees forever.

2. Authorizing millions of shares and paying the first Delaware franchise tax notice instead of recalculating.

3. Skipping the organizational meeting paperwork, leaving no bylaws, no board consent, and no stock records.

4. Missing the 30-day 83(b) window. There is no fix.

5. Forgetting foreign qualification in the state where you actually operate.

6. Treating formation viewed as a one-time event rather than the start of an annual compliance cycle.

The Bottom Line

Forming a corporation is less about the initial filing and more about taking informed early decisions: selecting the appropriate state, establishing a sound share structure, completing accurate founder documentation, and implementing a compliance calendar. Dealing with these elements within the first 30 days positions the corporation for successful interactions with banks and investors, as well as during due diligence.

If you'd rather not track every deadline yourself, CoverPin handles entity formation, registered agent service, annual reports, and license renewals across all 50 states and 87 countries from one dashboard. The software is free, and you only pay when you order a service.

Frequently Asked Questions

How long does it take to form a corporation?

State processing ranges from same-day to several weeks, depending on the state and whether you pay for expedited service. Budget one to two more weeks for the EIN, bank account, and organizational documents.

How much does it cost to form a corporation?

You'll pay a state filing fee, which ranges from under $100 to several hundred dollars depending on the state. On top of that come registered agent fees and, if you use them, legal or filing service fees. Then budget for recurring costs: annual reports, franchise taxes, and foreign qualification in any other state where you operate.

Can one person form a corporation?

Yes. No state requires more than one owner, and in virtually every state one person can serve as incorporator, sole director, and every officer. A few states have special rules on officer roles, so check your state's corporation statute.

Do I need a lawyer to incorporate?

Not to file the articles. A lawyer is worth it for investor-ready documents, founder vesting, multiple founders, or anything unusual about your equity.

Should I incorporate in Delaware?

If you plan to raise venture capital, usually yes. If you're a local, owner-run business, your home state is usually simpler and cheaper.

Do new corporations have to file a BOI report in 2026?

No, not if the corporation was formed in the US. Under FinCEN's final rule, effective August 14, 2026, only certain foreign companies registered to do business in the US must still report.

Can a non-US resident form a US corporation?

Yes. There is generally no citizenship or residency requirement for shareholders or directors. You'll need a US registered agent. Without an SSN or ITIN, you'll obtain an EIN by fax, by mail, or through the IRS international phone line rather than the online application.

What happens after I form my corporation?

You adopt bylaws, issue stock, file any 83(b) elections, get an EIN, and open a bank account. After that, you keep up with annual reports, franchise taxes, and license renewals in every state where you're registered.

Last verified in September 2026.