How to Form a Corporation: Steps, Types & Fees

So, you’ve opened a new business, and now you want to register it as a corporation in your state. What process should you follow? What requirements or fees should you meet or pay?

Compared to other business structures, corporations are the hardest and the most time-consuming to set up. They require a good deal of filing fees plus filling in paperwork. This business structure is an excellent choice if you’re looking to raise money from investors or list your entity on the stock exchange one day.

Steps to Forming a Business Corporation

This post will outline the steps to follow when incorporating your business. We will also discuss the types, characteristics, requirements, and fees payable when forming a corporation.

Characteristics of a Corporation

Corporations have several unique characteristics that set them apart from other business structures. Let’s explore a few attributes that come with a corporation:

Separate Entity

A corporation is a separate legal entity from its owner or shareholders. This business structure has its own legal rights distinct from those who own it. A corporation can own, buy and sell assets under its name. It can also enter into a binding contract or litigation as its own entity.

Limited Liability Protection

A corporation offers limited liability protection to its shareholders. If you take a loan in your corporation’s name, your lender or creditor cannot claim your personal assets if you default. They only have a legal claim on your corporation’s assets.

Double Taxation

Corporations are subject to double taxation. They pay taxes twice, once at the corporate level and again at the individual level. Corporations pay taxes on the profits they make at a certain period or quarter. They also get taxed on the dividends distributed to the shareholders.

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Ability to Raise Capital

It’s easier for a corporation to raise capital than any other business structure. Corporations can raise money from investors by selling common and preferred stocks. They can also acquire funds through corporate bonds and loans from banks and lenders.

Ownership Transferability

The process of transferring ownership in a corporation doesn’t require approval from other shareholders or from the entity itself. You simply sell your shares to private or public investors. Once you sell them, you give up your stake in the business, and the new investor becomes a part-owner. In a partnership, you would have to consult all your partners before transferring ownership.

Board and Management Structures

Corporations have a more complex management structure than any other form of ownership. They need to have a board of directors representing the shareholders’ interests.

The board should hold annual formal meetings and record the minutes discussed. They should also elect a team of executives who then employ senior managers and other employees in the corporation.

Types of Corporations

C-Corporation

C-corps are the most common of all the other corporate structures. They are subject to double taxation and can be formed by any aspiring entrepreneur or entity, whether domestic or foreign.

There’s no shareholder limit in a C-corp. This business structure can have as many owners as it wants, whether 10 or 1000. Transfer of shares is relatively easy and limitless in a C-corp.

S-Corporation

An S-corp is a corporation taxed like a sole proprietorship or partnership but operates like a corporation. This business structure isn’t subject to double taxation. The IRS taxes an S-corp at the individual level through the pass-through taxation method. The profits or losses of the S-corp get split up amongst shareholders, who then report the taxes on their personal tax returns.

An S-corp can have no more than 100 shareholders. To register your corporation as an S-corp, each owner needs to be a U.S. citizen or a resident alien — non-resident aliens aren’t eligible to hold shares. Your corporation should also offer only one class of stock.

One exception to the shareholder cap: the IRS allows members of the same family, across up to six generations, to count as a single shareholder for this purpose. That means a family-owned business with well over 100 individual owners can still qualify as an S-corp.

Non-Profit Corporation

A non-profit corporation is a type of corporation that’s a separate entity from its owners and whose goals don’t entail making a profit. This business structure isn’t subject to taxation. You can register as a non-profit corporation if your goals involve charity, education, or religious work, or at least anything other than making a profit.

Requirements for Forming a Corporation

What legal obligations should you or your business meet to form a corporation? The requirements may vary depending on the corporation type you select. Some should be adhered to when registering the corporation, while others after the incorporation process is complete.

There are two requirements you need to meet when forming a corporation: filing articles of incorporation, and creating corporate bylaws (bylaws are covered in the step-by-step section below). Here’s what filing articles of incorporation involves.

Filing Articles of Incorporation

You need to file articles of incorporation if you want to register a corporation in the United States. This set of formal documents acts as proof of registration and authorizes you to run the corporation. The information to provide on the articles of incorporation includes:

Your entity’s name
The entity’s address
Your registered agent’s name and address
Information on stocks
The corporation’s purpose

Some requirements may vary depending on the state where you are incorporating.

Let’s explore the requirements that your corporation should follow after incorporation.

The corporation must file tax returns annually.
The corporation must elect a board of directors.
The board of directors must hold an initial meeting and subsequent meetings at least once a year.
The corporation must maintain its bookkeeping, records of shareholders, and accounting ledgers.
The corporation must record and maintain board meeting minutes.
The corporation must issue securities (stocks) to shareholders.
As of a federal rule that took effect in March 2025 and remains in effect as of mid-2026, domestic LLCs are exempt from Beneficial Ownership Information (BOI) reporting to FinCEN. Whether this exemption also applies to your corporation should be confirmed directly, since these rules can change.

Fees for Forming a Corporation

The total fee payable for forming a corporation depends on your state and the incorporation process you follow. You can either incorporate the business yourself or hire experts to do it for you. Whichever method, you still have to pay the incorporation filing fee. You’ll pay this fee when filing articles of incorporation with the secretary of state in your location.

The filing fees vary from one state to another. In Delaware, the certificate of incorporation filing fee is $109 as of the state’s fee schedule revised in August 2026 — many guides still quote an older $89 figure, so it’s worth double-checking current pricing before you file. This $109 rate holds as long as you authorize 1,500 or fewer no-par shares (or keep authorized shares times par value under $75,000); authorizing more shares increases the fee. In California, the filing fee for Articles of Incorporation providing for shares is $100.

Other costs that may arise when incorporating include (figures current as of 2026):

Incorporation service costs – you’ll pay this fee if you choose to hire a formation service to incorporate your business for you. Costs range from $0 (plus the state filing fee) for a bare-bones filing-only plan up to around $400 for a fuller-service package with operating documents and compliance tools.
Attorney’s fees – You can hire an attorney to assist you with incorporating and creating the corporate bylaws. Hourly rates generally run $150 to $500, and can be higher in major cities. Some attorneys charge a flat fee for straightforward incorporation paperwork instead of billing hourly.
Registered agent fees – You must have a registered agent when incorporating your business. The registered agent can be you or another owner or employee in your entity. It can also be a registered agent service company that you hire. If you choose to hire a registered agent service company, expect to pay $100 to $300 per year.
DBA registration fee – payable if your corporation operates under a name that’s not the one registered with the Secretary of State. It typically ranges from $25 to $150, depending on your state and county.
Licenses and permits fee – payable if you need a license or permit to conduct business.

How to Form a Corporation

Here are the steps to follow when forming your corporation:

1. Choose a Location

It’s always advisable to incorporate your business in the state where you conduct your operations. But if you have operations in more than one state, go for the one with the most favorable tax laws, for example, Nevada.

The rules and requirements for forming a corporation may vary from state to state. Take some time to learn the ones that apply to your state to ensure you don’t miss out on any essential steps.

2. Select a Business Name

Once you select your state of incorporation, your next step should be to choose a name for your corporation. Try selecting a business name that’s memorable, unique, and describes what you do.

Your business name should also not infringe any trademarks. It shouldn’t be in use by any other business in your state.

You can check the availability of the name on social media and online directories. You can also use name search tools provided by your state or the secretary of state in your area.

3. Appoint a Board of Directors

A board of directors is a group of people appointed by a corporation or an entity to represent the shareholders’ interests. When incorporating your business, the state requires you to nominate a board of directors.

The minimum or the maximum number of directors depends on the state but try and appoint at least three people. You can nominate other shareholders, investors, mentors, even yourself.

Some states may also require you to appoint a president, treasurer, and secretary to the board of directors.

4. Appoint or Hire a Registered Agent

A registered agent is someone you appoint to receive official and legal documents on your entity’s behalf. This person can be you or someone in your corporation. It can also be a registered agent service company that you hire.

The registered agent you select should have a physical address in your state of incorporation. They should also be reachable during business hours.

5. File Articles of Incorporation

Once you appoint your board and nominate your registered agent, you can begin the incorporation process. You will need to fill in articles of incorporation and file them with the secretary of state in your area.

As highlighted above, the information required in the articles of incorporation includes your corporation’s name and address, stock information, and your registered agent’s name and address.

If you plan to register as an S-corp, you can apply for the S-corp status with the IRS once you incorporate.

6. Draft Your Corporate Bylaws

You can draft your bylaws before or after filing your articles of incorporation. They are a set of rules that govern the management and operations of your corporation. It’s better to consult an attorney if you don’t know how to draft the corporate bylaws.

7. Hold the First Board of Directors Meeting

The state requires your board of directors to hold an initial meeting. Try and set a date, time, and location that ensures every board member shows up.

Your agenda in the initial board meeting can be to vote on the bylaws and appoint a president, secretary, and treasurer. You can also authorize the issuance of stocks. Don’t forget to record and store the minutes of the meeting.

8. Issue Stocks

Your next step should be to issue stocks once you get approval from the board. The issuing of stocks will help formalize ownership in the company. Every shareholder will know how much stake they have in the corporation.

9. Begin Operations

Now that you’ve registered your corporation, you can begin operations in your state. There may be other steps to follow when forming your corporation, but they depend on the nature of your business. For example, you can obtain licenses and permits if your business requires you to do so. You can also open a corporate bank account and apply for an EIN if you don’t have one.

Key Points and Facts About Forming a Corporation

Corporations are separate legal entities that offer limited liability protection to shareholders.
Corporations generally face double taxation — profits are taxed at the corporate level, then again as shareholder dividends. S-corps avoid this through pass-through taxation.
The three most common corporation types are C-corps, S-corps, and non-profit corporations.
S-corps are capped at 100 shareholders (with a family-attribution exception), who must be U.S. citizens or resident aliens.
State filing fees vary — for example, $109 in Delaware and $100 in California as of 2026.
Total incorporation costs can include the state filing fee, plus optional costs for a formation service, an attorney, and a registered agent.

Action Steps for Forming a Corporation

Choose Your State and Name

Decide whether to incorporate in your home state or another state with favorable tax laws.
Search your state’s business name database and confirm the name isn’t already in use.

Set Up Your Leadership Structure

Appoint at least three board members, or check your state’s specific minimum.
Decide whether you’ll be your own registered agent or hire a service.

File and Formalize

File your articles of incorporation with your secretary of state and pay the filing fee.
Draft your corporate bylaws, with an attorney’s help if needed.
Hold your first board meeting to vote on bylaws and authorize stock issuance.

Handle Ongoing Compliance

Issue stock to formalize ownership.
Set up a system for annual tax filings and required recordkeeping.
Confirm whether BOI reporting currently applies to your corporation.

Checklist for Forming a Corporation

Choose your state and business name
- Decide where to incorporate — usually where you operate.
- Confirm the name is available and doesn’t infringe on existing trademarks.
Appoint a board of directors
- Nominate at least three people, or check your state’s specific minimum.
Appoint a registered agent
- Pick someone with a physical address in your state who’s available during business hours.
File your articles of incorporation
- Submit to the secretary of state along with the filing fee.
Draft your corporate bylaws
- Set the rules for how your corporation will operate.
Hold your first board meeting
- Vote on bylaws, appoint officers, and authorize stock issuance.
Issue stock
- Formalize ownership once the board approves.
Handle post-incorporation requirements
- File annual tax returns, maintain records, and check whether BOI reporting currently applies to your corporation.

FAQ: Forming a Corporation

How much does it cost to form a corporation?

Costs vary by state and how you choose to incorporate. Expect to pay a state filing fee (for example, $109 in Delaware or $100 in California as of 2026), plus optional costs for a formation service, an attorney, and a registered agent if you don’t act as your own.

What’s the difference between a C-corp and an S-corp?

A C-corp is taxed twice — once on corporate profits and again on shareholder dividends — and has no cap on the number of shareholders. An S-corp avoids double taxation through pass-through taxation but is capped at 100 shareholders, who must be U.S. citizens or resident aliens.

Do I need a lawyer to incorporate my business?

No, you can file the paperwork yourself, but an attorney can help if you want guidance drafting your bylaws or navigating state-specific rules. Attorney fees for this kind of work generally run $150 to $500 per hour.

Do new corporations need to file a Beneficial Ownership Information (BOI) report?

As of a federal rule that took effect in March 2025 and remains in effect as of mid-2026, domestic LLCs are exempt from BOI reporting. Whether this exemption also extends to corporations should be confirmed directly, since these rules can change.

Conclusion

The process of forming a corporation is a bit complex compared to other business structures. There are several requirements that you need to meet before and after incorporating.

The most common corporation types you can form in the US include S-corp, C-corp, and non-profit corporations. Any individual or entity can form a C-corp, whether a United States citizen or foreigner. To register as an S-corp, each owner needs to be a U.S. citizen or a resident alien.

The process of incorporating involves choosing a state and a business name, appointing a board of directors, and filing the articles of incorporation with your secretary of state. You should also nominate a registered agent to receive legal documents on your corporation’s behalf. Once you incorporate, draft your corporate bylaws and hold the first board meeting.

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