Forming a corporation limits your personal liability and protects your personal assets. A single business owner may incorporate by himself in any state. Before filing the Articles of Incorporation, decide which state you want to incorporate in and choose an appropriate business name.
When you incorporate, you form a distinct business entity that separates your personal and business activities. As long as you don't mix personal assets with your corporation assets, you're protected by what's known as the corporate veil. This means that you have limited liability for corporate actions and you can't be held personally liable for business debts. It also means that the corporation files and pays its own income taxes. If you want to take income or assets from the corporation, you must pay yourself a salary or issue yourself dividends.
According to Nolo, every state allows an individual to form a corporation by himself. This individual, known as the incorporator, completes and files the Articles of Incorporation with the state. Most states require that a corporation have a designated shareholder, director, president, treasurer or a chief financial officer. However, a single individual can fill any and all of these roles if he chooses.
Choose a State
Before beginning the process of incorporating, decide what state you want to incorporate in. Corporate tax rates vary, so your home state may or may not be the most cost-effective choice. Some states, like Delaware, don't tax out-of-state income. Nevada doesn't levy any state tax on corporations. However, if you do decide to incorporate in another state, you must have an active business presence in that state. Essentially, this means you must have an active business office in the state.
Choose a Name and File
To incorporate, choose a business name and file your Articles of Incorporation. Exact requirements vary by state, but at a minimum you must choose a name not currently in use by another corporation that ends with a corporate designator like "Inc" or "Ltd." You also cannot use a name that suggests you are a bank or associated with the federal government. Contact your secretary of state to check specific requirements for the Articles of Incorporation and file the completed form with your state filing office.