Disclaimer: I am not a lawyer (IANAL). This list is intended as a learning tool and you should definitely consult with a lawyer if you have any questions or concerns. This is a work in progress, so suggestions and pull requests are welcome!
Other than building a product people want, incorporating a new business is essential to raising money, opening a bank account, and creating a legal entity for contracts and other liabilities. For technical folks like me, it's the "necessary evil" of founding a company and just needs to get done. Having gone through this recently, I made a checklist in case I'd have to do it again in the near future. Why you should incorporate in DE is outside the scope of this article, but other folks have written good answers.
Some notes:
- The full process will take several weeks to complete
- Most steps are sequential and depend on an earlier step being complete
- Many steps require the use of snail mail or a fax machine
- For brevity, Delaware and California are shortened to DE and CA
- Again, consult your lawyer. Some will defer fees for startups
- Choose a name for your business and check that it's available. DE Name Search & CA Name Search
- Generate incorporation documents and sign them [service]
- Buy registered agent service in DE - 1 yr Free
- File incorporation docs with DE - ~$150 including fees for 1 week service
- You can do this yourself, but it will probably take longer and not save you much money
- Apply for a Federal Employer Identification Number (EIN) - Free
- IRS info & form
- Expect the IRS to mail you a document containing your EFTPS Pin. This allows you to pay federal taxes electronically
- (for founders with stock vesting) File 83b election within 30 days of stock grant
- reference: https://www.irs.gov/irb/2012-28_IRB/ar12.html
- example letter: http://accountalent.com/83b-elections-for-dummies/
- (only for S-corp) File IRS Form 2553 to convert C-corp to S-corp
NOTE: Most of the following steps require a valid U.S. checking account and the steps above allow you to open an account. This is probably the best time to do so.
- Order certified copy of Certificate of Good Standing from DE - $50
- Fill out DE fillable form and fax to (302) 739-3812
- Sign up for Registered agent service in CA 1 yr free
- Register with CA Secretary of State - $100
- Fill out CA form S&DC - S/N
- Make sure NOT to include mailing address for registered agent
- Include DE Certificate of Good Standing with mailed form
- (optional for solo founders) Exclude yourself from paying SDI taxes
- Within 90 days of CA registration, file Statement of Information (SI-350) - $25
- Sign up to make IRS payroll tax payments electronically - Free
- Enroll via phone call to IRS 1-800-555-3453
- have your EFTPS Pin and checking account info handy
- be prepared to write down enrollment number
- Set password via EFTPS password form
- Confirm enrollment via EFTPS login form
- Enroll via phone call to IRS 1-800-555-3453
- Register with CA Employer Development Department (CA EDD) - Free
- Sign up with Social Security Business Services - Free
- varies File and pay CA payroll taxes
- varies File and pay Federal payroll taxes
- yearly File federal tax return
- (S-corp only) File IRS Form 1120S (instructions)
- (C-corp only) File IRS Form 1120 (instructions)
- (LLC-only) depends on ownership structure, but partnerships must distribute IRS Schedule K-1 to each owner
- yearly File DE annual report and pay franchise tax >= $350
- yearly File CA tax return
- yearly Send W2 to employees
- yearly File W3 with IRS
- yearly Send 1099 to contractors, lawyers, et. al.
- Founder's Workbench - generate incorporation documents
- FreeRegisteredAgent - one year of free registered agent service in DE and/or CA
- HelloFax - send faxes without a fax machine
- InCorp - will file DE incorporation papers quickly on your behalf for ~$150, including state fees