Small Business Development Guide
Corporation
An individual or group of people can form a corporation. The advantage of a corporation is that if managed appropriately, a corporation offers personal liability protection to the involved party/parties.
A corporation is created by filing the Articles of Incorporation and Appointment of Statutory Agent, along with an $125 filing fee, with the SEcretary of State of Ohio's office at (614) 466-3910 or (877) 767-3453. There are certain formalities for creation of the Articles of Incorporation and with maintaining a corporation such as rights of owners, adoption of by-laws, annual shareholder and board of directors meetings, etc. It is for this reason that it is recommended that you hire an attorney for assistance with filing and understanding what is necessary for your business. Expect to pay $500 to $1,000 for this legal service.
You will need a Tax ID number, which can be obtained by filing a SS-4 Form with the IRS at 1-800-TAX-FORM (1-800-829-3676). The corporation must also maintain its own bank account, separate from your own personal account.
If you are incorporated, even as a one-person operation, you are considered an employee. All employee requirements and payroll taxes apply. Please see the Employees section of this guide for tax and workers' compensation information.
There are two ways a corporation's taxes can be handled: as a regular corporation (commonly know as C-corporation) or as a sub-chapter S-corporation.