How to Incorporate a Company in the USA: Step-by-Step Guide

Incorporating is a series of small, sequential steps where each one generally needs the previous one to be finished first.

Founders usually know the first few and are surprised by what follows: the agent, the identifier, the bank account, the internal documents, and the obligations that begin the moment the entity exists and repeat every year afterwards.

This covers what incorporation actually gives you, the steps in the order they have to happen, what each one requires, roughly what the process costs, and how long it realistically takes.

What Does Incorporation Actually Mean?

Incorporating a company in the USA means filing formation documents with a state government to create a legally recognized business entity separate from its owners. The entity can sign contracts, own assets, hire employees, and be taxed independently.

Step 1: Choose Your Entity Type

For most startups planning to raise capital: Delaware C-Corporation. For most small businesses staying private: LLC in your home state.

Step 2: Choose Your State

You can incorporate in any US state regardless of where you operate. Most businesses choose between:

• Delaware: Preferred by VCs, Court of Chancery, predictable corporate law. Annual franchise tax minimum $175.
• Wyoming: Low fees ($100 formation, $60/year), strong privacy, no state income tax. Good for private companies.
• Your home state: Simplest if you operate locally, avoids foreign qualification filings.
• Nevada: Used to be popular for asset protection, largely superseded by Wyoming.

Step 3: File Articles of Incorporation (or Certificate of Formation)

For a C-corp, this is called Articles of Incorporation (or Certificate of Incorporation in Delaware). For an LLC, it is Articles of Organization (or Certificate of Formation). The document includes:

• Company name (must be unique in the state)
• Registered agent name and address
• Number of authorized shares (for corps) or member names (for LLCs, where required)
• Incorporator name and signature
• Principal office address

Filing fees: $89-$300 depending on state. Most states offer online filing with same-day or next-business-day approval.

Step 4: Appoint a Registered Agent

Every US business entity must have a registered agent: a person or company with a physical address in the state of incorporation, available during business hours to receive legal documents. You can be your own agent (if you are physically in the state) or hire a service.

Step 5: Get an EIN (Employer Identification Number)

An EIN is your company's federal tax ID, the business equivalent of a Social Security Number. Required for:

• Opening a business bank account
• Hiring employees
• Filing business tax returns
• Setting up payroll
• Applying for business licenses

How to get one:

• Online: IRS website (https://www.irs.gov), instant, free, available to US residents with SSN/ITIN
• Form SS-4 by fax: 4 business days. Required if you do not have an SSN (international founders).
• Form SS-4 by mail: 4-6 weeks

Step 6: Open a Business Bank Account

You need: EIN, formation documents (Articles of Incorporation/Organization), and sometimes an operating agreement or bylaws. Options:

• Traditional banks (Chase, Bank of America): Requires in-person visit, higher minimums
• Mercury: Online, free, great for startups. Works for non-US residents with a US entity.
• Relay: Online, no fees, good for multi-user teams
• Brex: Corporate card + banking, good for funded startups
• Wise Business: Good if you receive international payments

Step 7: Draft Bylaws (Corp) or Operating Agreement (LLC)

Bylaws govern how your corporation operates: board structure, officer roles, voting procedures, share issuance. Operating agreements govern LLCs: profit/loss allocation, member voting rights, decision-making procedures. Not filed with the state but essential for:

• Bank account opening (some banks require it)
• Investor diligence
• Resolving disputes among founders
• Establishing authority to sign contracts

Step 8: Issue Founder Shares and File 83(b) Election

For corporations: issue stock to founders immediately. If shares are subject to vesting (which they should be), file an 83(b) election with the IRS within 30 days of the grant date. This election starts your capital gains holding period and QSBS clock immediately, potentially saving hundreds of thousands in taxes.

Step 9: Foreign Qualify if Operating in Another State

If you incorporate in Delaware but operate in California (have employees, offices, or significant business activity there), you must register as a foreign corporation in California. This involves:

• Filing a Statement and Designation by Foreign Corporation in California
• Appointing a registered agent in California
• Paying California franchise tax (minimum $800/year)
• Filing California corporate tax returns

Cost Summary

Timeline

Frequently Asked Questions

Written by

Abhinav Gupta, CPA, CA, MBA

Abhinav works with business owners across the US on industry-specific bookkeeping, from dental practices and restaurants to construction and e-commerce. He writes about what each trade's books actually need. Connect on LinkedIn