How to Form a Corporation in Indiana
It is important to understand how to form a corporation in Indiana if you are thinking about starting this type of business3 min read
Steps to Creating an Indiana Corporation
It is important to understand how to form a corporation in Indiana if you are thinking about starting this type of business, or have already begun the process of planning your business. Follow the steps below to help you through the process.
1. Choose Your Business Name
The first step to creating your corporation in Indiana is to research the business name you plan to use for your corporation, and ensure that it is available. This information can be found on the Indiana Secretary of State's website.
The name of the corporation must meet the following standards:
- It must be distinguishable from other corporations' names that are already on record with the Secretary of State.
- It must include one of the following terms or abbreviated terms: corporation, company, incorporated, limited, LLC, Co., Inc., Ltd., or Corp.
2. Confirm That Your Corporation Meets the Requirements to File as a Corporation in Indiana
The state of Indiana maintains the following requirements for a corporation:
- There must be at least one incorporator.
- The incorporator must be a person.
- There must be at least one corporate director. If there are no initial directors for the corporation, an organizational meeting must be held to elect the directors.
- The directors must be at least 18 years of age.
3. Determine Which Type of Corporation is Right For Your Business
There are two types of corporations to choose from in Indiana: an S corporation and a C corporation. These have many similarities; for instance, both corporation types are recognized as individual entities. There are also important differences which may help you choose the right option for your business. These include:
- Indiana C Corporation
- Only one stock class or type is permitted.
- May have any number of shareholders.
- File corporate tax returns as a separate entity from the shareholders.
- Shareholders do not report business income on their personal tax returns.
- Dividends paid out to shareholders are taxed.
- Shareholders have limited liability for the debts and obligations of the company.
- Indiana S Corporation
- 100 or fewer shareholders
- Only U.S. residents are permitted to hold shares of the company.
- Shareholders are not typically liable for judgments against the company.
- The corporation does not file a tax return of its own.
- Pass-through taxation is utilized, which helps avoid “double taxation” for the shareholders.
- Income from the company is reported directly on individual tax returns of the shareholders.
4. Select the Stock Structure of the Business
As a corporation, there are several options for stock types. These stock types may also be referred to as a stock class or series. The stock types differ based on the advantages they provide to the corporation.
There are several requirements to follow when choosing and listing the stock types:
- When referencing the stock type in the articles of incorporation, the total number of authorized shares must be listed.
- If listing multiple types or classes of shares, the articles of incorporation must list each of the stock types along with the number of shares for each.
- The article must state the relative rights, the preferences, and the limitations for each of the classes before the shares are issued.
5. Appoint a Registered Agent for the Corporation
A registered agent is a person responsible for correspondence on behalf of the business. This includes legal documents and other official correspondence. The specification of the registered agent must meet the following criteria:
- The agent must be listed in the articles of incorporation.
- The agent's registered office address must be a physical address in the state of Indiana.
- The agent must be either a person who lives in Indiana, or a corporation that was previously formed in Indiana or authorized to do business in Indiana.
- The registered agent cannot be the corporation itself.
6. File the Article of Incorporation with the Indiana Secretary of State
- Name of the business you are incorporating that meets the standards outlined above.
- The stock structure of the business, following the requirements previously listed.
- The names and addresses of each of the registered agents.
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