Corporation Formation Attorneys
Experienced legal representation for corporation formation matters across all 50 states.
About Corporation Formation
Corporation formation is the legal process of establishing a corporation — a distinct legal entity that exists separately from its owners (shareholders) and provides the strongest form of limited liability protection available under American law. Corporations are governed by the laws of the state in which they are incorporated, with Delaware and Nevada being particularly popular choices due to their well-developed corporate statutes and business-friendly courts. The incorporation process involves filing articles of incorporation (also called a certificate of incorporation or corporate charter) with the Secretary of State, adopting bylaws, appointing directors and officers, issuing stock, and holding an initial organizational meeting.
Corporations come in two primary forms for tax purposes. A C-corporation is a standard corporation that pays corporate income tax on its profits, and shareholders pay individual income tax on dividends they receive — often referred to as "double taxation." An S-corporation, created by filing an election with the IRS, avoids double taxation by passing income through to shareholders' personal tax returns, but is subject to restrictions including a maximum of 100 shareholders who must generally be U.S. citizens or residents. The choice between C-corporation and S-corporation status has significant tax and operational implications that should be carefully evaluated with both legal and tax advisors.
Corporations are the preferred entity for businesses planning to seek venture capital or private equity investment, issue stock options to employees, or eventually pursue an initial public offering (IPO). The corporate structure provides a well-understood governance framework, predictable legal rules, and the ability to issue multiple classes of stock with different voting and economic rights — features that are particularly important to institutional investors and sophisticated market participants.
Why You Need a Corporation Formation Attorney
Despite the growing popularity of LLCs, corporations remain the entity of choice for businesses seeking to raise significant outside capital. According to the National Venture Capital Association, venture capital investors deployed over $170 billion in U.S. startups in recent years, and the vast majority of venture-backed companies are organized as Delaware C-corporations. The corporate form provides a familiar and predictable legal framework that facilitates investment, with clear rules governing fiduciary duties, shareholder rights, and corporate governance. For businesses that plan to attract institutional investors, issue equity compensation to a large workforce, or eventually go public, the corporate structure is typically the most appropriate choice. Beyond fundraising, the corporate form offers perpetual existence (the entity continues regardless of changes in ownership), easy transferability of ownership through stock sales, and a well-established body of case law providing guidance on virtually every corporate governance issue. A corporation formation attorney ensures that the business is structured correctly from the outset, avoiding costly restructuring later when investors or acquirers come to the table.
Common Corporation Formation Cases
C-Corporation Formation for Startups
Forming Delaware C-corporations for technology startups and other ventures seeking venture capital investment. Includes standard startup documentation such as articles of incorporation with protective provisions, bylaws, stockholder consent actions, and restricted stock agreements.
S-Corporation Formation
Incorporating businesses that qualify for and benefit from S-corporation tax treatment, including preparing articles of incorporation, bylaws, and IRS Form 2553 election. Commonly used by small professional practices and service businesses.
Professional Corporation Formation
Forming professional corporations (PCs or PAs) for licensed professionals such as physicians, attorneys, CPAs, and engineers, in compliance with state-specific professional corporation statutes and licensing board requirements.
Close Corporation Formation
Establishing close corporations or statutory close corporations available in certain states, which provide simplified governance requirements and enhanced shareholder protections for businesses with a small number of shareholders.
Benefit Corporation Formation
Incorporating as a benefit corporation or B-Corp in states that offer these designations, allowing the corporation to pursue social and environmental goals alongside profit without breaching fiduciary duties.
Holding Company and Subsidiary Structures
Creating corporate structures with parent holding companies and operating subsidiaries to isolate liability, facilitate acquisitions, enable tax planning, and organize complex business operations.
Corporate Conversion
Converting existing LLCs, partnerships, or sole proprietorships into corporate form, including statutory conversions and tax-free reorganizations under the Internal Revenue Code.
Typical Corporation Formation Case Timeline
Planning and Structuring
1–2 weeksEvaluating the appropriate corporate structure, state of incorporation, authorized share structure, and tax elections. For startups, this includes advising on founder equity splits and vesting schedules.
Filing Articles of Incorporation
1–7 business daysPreparing and filing the articles of incorporation (certificate of incorporation) with the state. Delaware offers same-day and 24-hour expedited processing; other states typically process within 3 to 7 business days.
Organizational Actions
1–2 weeksAdopting bylaws, appointing initial directors and officers, issuing stock to founders, filing IRS Form 2553 if electing S-corporation status, and preparing organizational resolutions documenting all initial corporate actions.
Equity Documentation
1–3 weeksDrafting and executing founder stock purchase agreements, restricted stock agreements, intellectual property assignment agreements, and establishing a stock option plan if equity compensation will be offered to employees.
Post-Incorporation Compliance
1–2 weeksObtaining an EIN, opening corporate bank accounts, registering in states where the corporation will do business, obtaining business licenses, and establishing the corporate record book and stock ledger.
Annual Governance Cycle
OngoingConducting annual shareholder and board meetings, adopting annual resolutions, filing annual reports, paying franchise taxes, and maintaining corporate records to preserve limited liability protection.
Know Your Rights
- Shareholders have the fundamental right to vote on major corporate actions including election of directors, amendments to the articles of incorporation, mergers and acquisitions, and dissolution.
- Shareholders have the right to inspect the corporation's books, records, and shareholder list upon proper demand and for a proper purpose.
- Minority shareholders are protected against freeze-out transactions and self-dealing by controlling shareholders through fiduciary duty requirements.
- Directors are entitled to rely in good faith on reports and opinions of officers, employees, and professional advisors, and the business judgment rule protects reasonable board decisions from judicial second-guessing.
- Shareholders have the right to bring derivative lawsuits on behalf of the corporation when directors or officers breach their fiduciary duties and the board fails to act.
- Corporate officers and directors may be entitled to indemnification for expenses incurred in litigation arising from their corporate roles, as provided by statute and the corporate bylaws.
- Shareholders have preemptive rights to participate in new stock issuances in proportion to their current ownership, unless the articles of incorporation provide otherwise.
What to Look for in a Corporation Formation Attorney
A corporation formation attorney should have extensive experience with the specific type of corporation you need — whether it is a startup C-corporation, a small business S-corporation, or a professional corporation. For startup founders, look for an attorney experienced with venture capital and startup finance who can structure the company from day one in a way that facilitates future investment rounds. Ask about experience with standard startup documentation (NVCA or similar forms), stock option plans, and convertible instruments. For S-corporations, ensure the attorney works closely with tax professionals to optimize the corporate structure and comply with S-corporation eligibility requirements. The attorney should explain the ongoing governance obligations of a corporation — which are more extensive than those of an LLC — including annual meetings, board resolutions, stock ledger maintenance, and regulatory filings. Ask for a clear fee estimate, as most straightforward incorporations can be done on a flat-fee basis.
Questions to Ask Your Corporation Formation Attorney
- 1Should I form a C-corporation or S-corporation, and what are the specific tax implications for my situation?
- 2In which state should I incorporate, and what are the costs and advantages of Delaware versus my home state?
- 3How should the authorized share structure be set up, and how many shares should be issued to founders initially?
- 4What vesting schedule do you recommend for founder stock, and why?
- 5What are the annual compliance requirements and associated costs for maintaining the corporation?
- 6If I plan to raise investment capital in the future, what should I do now to prepare the corporate structure?
- 7What corporate records must I maintain, and how should board meetings and resolutions be documented?
Understanding Corporation Formation Legal Costs
Corporation formation costs include state filing fees and attorney fees. Delaware filing fees start at approximately $89 for standard articles of incorporation, with franchise taxes starting at $400 per year. Other states' filing fees range from approximately $50 to $500. Attorney fees for a straightforward incorporation including articles, bylaws, organizational resolutions, and initial stock issuance typically range from $1,500 to $5,000. Startup incorporation packages that include founder stock agreements, IP assignments, and stock option plan documentation generally range from $5,000 to $15,000. S-corporation formations tend to cost less than C-corporation startup packages because they typically involve simpler equity structures. Ongoing costs include annual franchise taxes (which vary significantly by state — Delaware franchise taxes can range from $400 to over $200,000 for large companies), registered agent fees, and annual compliance work.
Key Legal Terms
Video Resources
These videos are provided for informational purposes only. The attorneys and organizations featured are not affiliated with or endorsed by Northwind Law.
LLC vs Corporation: Which Entity Is Right for You?
Aimee the Attorney
S-Corp vs C-Corp Explained
LegalEagle
Choosing Your Business Structure
U.S. Small Business Administration
Frequently Asked Questions About Corporation Formation
Citations & Sources
- [1]Over 66% of Fortune 500 companies and more than 1.9 million entities are incorporated in Delaware due to its well-developed corporate law and business-friendly Court of Chancery. — Delaware Division of Corporations
- [2]Approximately 5.2 million S-corporation tax returns are filed annually, making S-corporations one of the most common business entity types in the United States. — IRS Statistics of Income
- [3]Venture capital investors deployed over $170 billion in U.S. companies, with the vast majority invested in Delaware C-corporations. — National Venture Capital Association
- [4]The Delaware General Corporation Law is considered the most advanced and flexible corporate statute in the United States, providing a comprehensive legal framework for corporate governance. — Harvard Law School Forum on Corporate Governance
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