Corporation Formation Services
Incorporate your business with confidence. We make corporate formation simple, professional, and affordable.
What is a Corporation?
A corporation is a legal entity that is separate and distinct from its owners (shareholders). It's one of the most formal business structures available, offering the strongest protection for personal assets while providing opportunities for growth, investment, and tax planning.
When you incorporate, you create a "legal person" that can enter into contracts, own property, sue and be sued, and conduct business independently of its owners. This separation provides significant liability protection and creates a professional business structure that investors and lenders prefer.
Key Features of a Corporation:
- Strong liability protection for shareholders
- Ability to raise capital through stock sales
- Perpetual existence (continues beyond original owners)
- Established management structure (board, officers)
- Enhanced credibility with investors and partners
Understanding Corporation Types: C-Corp vs S-Corp
C-Corporation (C-Corp)
The default corporation type, offering maximum flexibility for growth and investment but subject to double taxation.
Key Characteristics:
- • Unlimited number of shareholders
- • Multiple classes of stock allowed
- • Foreign investors permitted
- • Double taxation (corporate + personal)
- • Can retain earnings at corporate level
- • Easier to go public or sell to larger companies
Tax Forms Required:
- Form 1120: U.S. Corporation Income Tax Return
- Form 1120S: Not applicable for C-Corps
- Schedule K-1: Not issued (dividends on 1099-DIV instead)
S-Corporation (S-Corp)
A special tax election that provides pass-through taxation while maintaining corporate structure and liability protection.
Key Characteristics:
- • Maximum 100 shareholders
- • Only one class of stock
- • Only U.S. citizens/residents as shareholders
- • Pass-through taxation (no double taxation)
- • Profits/losses pass to personal returns
- • Saves on self-employment taxes
Tax Forms Required:
- Form 1120S: U.S. Income Tax Return for S Corporation
- Schedule K-1: Issued to each shareholder
- Form 2553: Election by Small Business Corporation
Detailed Comparison: C-Corp vs S-Corp
| Feature | C-Corporation | S-Corporation |
|---|---|---|
| Taxation | Double taxation (corporate + shareholder level) | Pass-through taxation (only shareholder level) |
| Number of Shareholders | Unlimited | Maximum 100 |
| Shareholder Types | Individuals, corporations, partnerships, foreign investors | Only individuals (U.S. citizens/residents), certain trusts |
| Stock Classes | Multiple classes allowed | Only one class of stock |
| Self-Employment Tax | Not applicable to shareholders | Saved on distributions above reasonable salary |
| Retained Earnings | Can retain earnings in corporation | Must distribute or pay tax on retained earnings |
| Fiscal Year | Can choose any fiscal year | Must use calendar year (with exceptions) |
| Investment Flexibility | High - attracts venture capital and institutional investors | Limited - restrictions may deter some investors |
| Fringe Benefits | Full deduction for owner-employees | Limited deduction for >2% shareholders |
| Operating Losses | Remain at corporate level | Pass through to shareholders' personal returns |
Required Tax Forms and Filings
C-Corporation Tax Forms
Form 1120 - Corporate Income Tax Return
Annual return reporting corporate income, deductions, and tax liability. Due March 15th (or 15th day of 3rd month after fiscal year end).
Form 941 - Quarterly Employment Tax
Required if the corporation has employees. Reports wages and tax withholdings quarterly.
Form 1099-DIV - Dividend Distributions
Issued to shareholders receiving dividends. Shareholders report on personal returns.
State Corporate Tax Returns
Most states require separate corporate income tax returns with varying due dates.
S-Corporation Tax Forms
Form 1120S - S Corporation Income Tax Return
Information return showing income, deductions, and credits. Due March 15th. No tax paid at corporate level.
Schedule K-1 - Shareholder's Share
Issued to each shareholder showing their share of income, deductions, and credits to report on personal returns.
Form 2553 - S Corporation Election
Must be filed to elect S-Corp status. Due by March 15th of the tax year the election takes effect.
Form 941 - Quarterly Employment Tax
Required for employee wages and shareholder-employee salaries.
How to Decide: C-Corp or S-Corp?
Choose C-Corporation if you:
- Plan to seek venture capital or go public
- Want to retain earnings in the business for growth
- Need multiple classes of stock or foreign investors
- Want maximum fringe benefit deductions
- Expect to have more than 100 shareholders
- Plan for acquisition by larger companies
Choose S-Corporation if you:
- Want to avoid double taxation
- Want to save on self-employment taxes
- Expect business losses in early years
- Have 100 or fewer U.S. citizen/resident shareholders
- Don't need multiple classes of stock
- Want pass-through of profits and losses
How IncCraft.com Can Help Set Up Your Corporation
At IncCraft.com, we make corporation formation straightforward and professional. Our experienced team handles all the complexities of incorporating your business, from initial filing to ongoing compliance support, so you can focus on building your company.
Complete Incorporation Service
We handle all articles of incorporation, bylaws, corporate resolutions, and state filing requirements for both C-Corp and S-Corp formations.
Fast Professional Processing
Get your corporation formed quickly with our expedited services. Most incorporations completed within 1-5 business days depending on state.
S-Corp Election Assistance
We help you file Form 2553 for S-Corporation tax election and ensure all deadlines are met for optimal tax treatment.
Corporate Documents Package
Receive professional bylaws, stock certificates, corporate seal, stock ledger, and minute book to ensure proper corporate governance.
All 50 States Coverage
We can incorporate your business in any state, with expertise in Delaware, Nevada, Wyoming, and your home state advantages.
Ongoing Compliance Support
Annual report reminders, registered agent services, and ongoing support to maintain your corporate status and good standing.
Frequently Asked Questions
What's the difference between forming an LLC and a Corporation?
Corporations offer more formal structure, easier access to capital, and different tax options, while LLCs provide more operational flexibility and simpler tax treatment. Corporations are better for businesses planning to seek investment or go public.
How much does it cost to incorporate?
State filing fees typically range from $50 to $500. Our service fees start at $149 plus state fees, making professional incorporation affordable for any business size.
Can I elect S-Corp status later?
Yes, you can elect S-Corporation tax treatment after forming a C-Corporation, but you must file Form 2553 within specific deadlines. We can help ensure you meet all requirements and deadlines.
Which state should I incorporate in?
Most small businesses should incorporate in their home state. Delaware offers advantages for larger companies or those seeking investment. We can help you choose the best state for your specific situation.
What ongoing requirements do corporations have?
Corporations must file annual reports, hold annual shareholder meetings, maintain corporate records, and file appropriate tax returns. We provide ongoing support to help you stay compliant.
Do I need a lawyer to incorporate?
While not required, professional assistance ensures proper formation and compliance. Our experienced team provides the expertise you need at a fraction of attorney costs.
Ready to Incorporate Your Business?
Join thousands of successful businesses that have incorporated with IncCraft. Our expert team, affordable pricing, and comprehensive support make incorporation simple and stress-free.
Professional service • Expert support • Affordable pricing