FAQ's

In which state should I incorporate?

You can form your company in any state you choose! Most American entrepreneurs choose to form a company in their home state. The majority of US non-residents without a strong reason to form in any given jurisdiction choose Delaware; other popular choices are New York and Florida because of their business-friendly environment and easy compliance requirements.  There may be licensing requirements to satisfy, and each state has their own laws regarding “what it means to do business.” If in doubt, you should consult with a legal/accounting professional to make sure you comply with state laws, and to provide you with tax guidance. SABC does not provide legal or tax advice. Regardless of where you do business, you should appoint a reliable registered agent.

What's the difference between a corporation and an LLC?

While both provide limited liability protection against personal assets, the major difference between a corporation and an LLC is pass-through taxation. Corporations also have many structural requirements laid out in their formation by-laws, whereas LLCs are not required to have any type of specific structure and enjoy fewer corporate formalities. 

What information/documents are needed for an Inc/LLC?

Articles of Incorporation form a Corporation, while Articles of Organization form an LLC. Both types of Articles are filed with the Secretary of State. States have different information requirements, but the most common information needed is the name of the entity, mailing address, registered agent, and stock information (corporations only). Once an LLC is formed, members of the LLC enter into an agreement called an Operating Agreement, which governs the LLC’s business, and members’ financial and managerial rights and duties. Corporations are governed by By-laws which give the corporation its structure. By-laws also set forth the rights and powers of shareholders, directors, and officers.

When is a Corporation a Professional Corporation? 

A corporation may be a Professional Corporation (PC) when it provides Professional Services. State and Regulatory boards determine what constitutes professional services and when a company is required to be a professional corporation (it varies by state). Examples of Professional Corporations may include doctors and health care professionals, lawyers, engineers and social workers. We recommend seeking legal advice if you think your corporation may be a Professional Corporation.

What are the differences between managers/members and Directors/Shareholders?

Members and managers are specific to LLCs. Members are typically the owners of the company, while managers are elected by the members of the LLC and are responsible for running the company. Shareholders and Directors are specific to corporations (INCs). Shareholders are financially invested in the company, and generally synonymous with owners.  Directors are elected by shareholders and direct the course of action a corporation takes. They usually have the ultimate legal responsibility over parties, except for shareholders, associated with the corporation’s activities.

What is a Corporate Kit and do I need one?

The Corporate Kit is a 3-ring binder with your company name embossed on the spine. It includes your company seal, membership certificates, sample operating agreement and sample minutes and resolutions.  A Corporate Kit is not required by the State but we do recommend one as it is handy for keeping all of your corporate records together (it is very expensive to replace the founding documents if lost). A company seal is also often required to open up a bank account. See our Corporate Kit page for more information.

How can I obtain an EIN/Tax ID number for my company?

The EIN/Tax ID is issued by the IRS.  You can visit the IRS website at http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN for more information about obtaining your EIN/Tax ID.  Here are the requirements for the online application:  http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online

What will I need to open a bank account for my company? 

We always suggest that you ask your bank for their specific requirements to open a corporate bank account.  Each bank will have its own set of documents required to open an account.  In general, banks typically want to see:  certified copies of corporate formation documents, copies of bank resolutions/minutes authorizing the opening of the account and naming authorized signers, signed and notarized bank signature cards and a corporate kit.  The Corporate Kit is a 3-ring binder which includes your company seal, membership certificates, sample operating agreement, sample minutes and resolutions. 

What is the best way for me to open a bank account for my new entity? 

We suggest that clients contact their preferred bank directly when they are ready to open their business bank account.  It is generally easier if you already have a personal relationship with the bank as they will most likely have the required identification documents on file for you.  If you are interested in working with a new bank, we suggest you speak with their business department as they should easily provide the required information and forms for you.  In order to open a bank account in the US a personal visit to the bank will be required (thus it is best that you deal with the bank directly).  If you or your client are not able to travel to the US immediately, we do have an attorney who can assist with your bank account needs until you can travel to the US for the personal appearance at the bank.  Please email us at clientsupport@startabusiness.com for more information regarding this service. 

What is a registered agent?

Most states require that companies doing business in a state have a physical presence in that state– either a registered office or a registered agent. In other words, each company is required to have a local address staffed with a person on whom a summons and/or complaint can be served in connection with any litigation. Official communications such as tax notices and other official communications are also sent to this address. Failure to have a registered agent can result in loss of “good standing,” which can affect a company’s ability to do business in that state. It can also lead to default judgments and financial penalties costing tens of thousands of dollars. We can serve as your registered agent in all 50 states, the District of Columbia, and most foreign jurisdictions – whether or not we originally formed your company. See our Registered Agent page for more information.

Why use a professional registered agent?

While companies can appoint any individual to act as registered agent, professionals have the training and expertise to take quick action when served with a summons, make recommendations for further action and recognize unofficial communications and scam solicitations. See our article on the benefits of a professional registered agent for more information.

Will I be able to speak with a StartABusiness.com representative if I have a question?

Absolutely! You can contact us during normal East Coast American business hours (roughly 7:00am-5:00pmEST), email us at clientsupport@startabusiness.com or request a callback.

How do your fees compare to similar companies?

Fees to form an LLC or incorporation are standardized on the state level, and we adhere to those fees. For the various services we offer, our pricing is competitive, but you will find that the level of customer service we provide is priceless.

How long do orders take to process?

LLC and Corporation formations are filed by state, and each state has different processing times. Some states, such as Delaware, can file an entity in as little as 24 hours, and some states may take up to 2 weeks. Expedited options are available in most states. Subsequent filings such as amendments and qualifications can take similar amounts of time. StartABusiness.com ensures all orders are completed in a timely, yet satisfactory, manner.

What services does StartABusiness.com offer after my company is formed?

We will be with you every step of the way, whether you are looking to stay in compliance, registered your business in another state, expand your business abroad or even terminate your entity, we will be there to help. StartABusiness.com provides customer service for the life of your business.

What are the ongoing state requirements to remain Active or in Good Standing? 

Each state has annual reporting requirements, and almost all states require both monetary value and current information about the entity to be filed. Due dates of the annual reports are dependent on the state itself and can vary by the entity’s anniversary date or by a set due date. Annual reporting fees also vary by state. All entities must maintain a Registered Agent in each state in which they are registered to do business. These requirements must be fulfilled to remain in “good standing.” For more information on how StartABusiness.com can help you remain in good standing, please read our Company Compliance Checklist and consider our Annual Report Maintenance Program.