Here is an outline of the steps you need to follow in order to form a corporation (specifically, a "C corporation") in Indiana. You should also read the general section on forming a corporation for information that is applicable in any state. Additionally, you should familiarize yourself with the Indiana Secretary of State's website, which has extremely useful information and resources.
1. Choose a business name for the corporation and check for availability.
- Please see our section on choosing and checking the availability of a name for your small business, as well as our section on the trademark law aspects of choosing a name.
- Indiana law requires that a corporation name contain the word "corporation," "incorporated," "company," or "limited," or the abbreviation "corp.," "inc.," "co.," or "ltd.," or words or abbreviations of like import in another language. Additionally, your corporation name must be distinguishable from other names on file with the Secretary of State (limited exceptions apply).
- Although you are not required to do so, consider registering your business name as a federal and/or state trademark.
2. Recruit and/or appoint a director or directors for the corporation.
- Under Indiana law, a corporation must have at least one director.
- There is no minimum age requirement.
- Directors need not be residents of Indiana or shareholders of the corporation, unless the articles of incorporation so require.
- Either the articles of incorporation or the corporation's bylaws must state the number of directors that will constitute the corporation's board of directors. The initial director or directors of the corporation may be named in the articles, but this is not required.
3. Prepare and file articles of incorporation with the Secretary of State.
- The filing fee is $90. The Secretary of State's website provides a simple, fill-in-the-blank form for articles of incorporation. Alternatively, you can file articles of incorporation online using the accessIndiana interface. For general information on corporate articles of incorporation, please see the Articles of Incorporation page.
4. Create the corporation's bylaws.
- There is no set criteria for the content of bylaws, but they typically set forth internal rules and procedures for the corporation, touching on issues like the existence and responsibilities of corporate offices, the size of the board of directors and the manner and term of their election, how and when board and shareholder meetings will be held, who may call meetings, and how the board of directors will function. You are not required to file bylaws with the Secretary of State, but the corporation must keep a copy at its principal place a business. For general information on corporate bylaws, please see the Bylaws page.
5. Hold an organizational meeting.
- See the Forming a Corporation page for details. You can find the Indiana statute relating to the organizational meeting at Ind. Code § 23-1-21-5 (scroll down).
6. Issue stock certificates to the initial owners of the corporation.
- See the Forming a Corporation section for details. The Indiana statutes relating to issuance of stock certificates are located in Chapter 26 of Article 1 of Title 23 of the Indiana Code. Unless the articles of incorporation state otherwise, the board of directors has the authority to set the "consideration" (i.e., the amount to be received) for each share of stock.
7. Obtain any required local licenses.
- See the Forming a Corporation section for details.
8. Determine what tax and other regulatory obligations the corporation has, and take care of any necessary registrations.
- Request an Employer Identification Number (EIN) from the IRS. This can be done via its online application. There is no filing fee.
- If you have an employee or employees in Indiana (including corporate officers), register for employment/withholding taxes online using the BT-1 Business Tax Application. The Department of Revenue provides instructions on the registration process.
- Whenever you hire an employee in Indiana, you must inform both the IRS and the State of Indiana. You can find details of all the necessary steps, including verifying work eligibility and withholding allowances, on the Hiring Employees section of the IRS website. You can find state-level information about reporting new hires at the Indiana New Hire Reporting Center website.
- If you have employees in Indiana (including corporate officers), you must carry workers' compensation insurance. You may choose to purchase it for yourself, but you do not have to do so.
- As a small business owner or employer, there may be other informational returns that you have to file annually or semi-annually with the IRS. For more information, take a look at the IRS Guide To Information Returns.
- Indiana's current corporate income tax rate is 8.5% of gross income.
9. Open a Bank Account for Your Business.
- It is a good idea to keep your business's finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your corporation. You will probably need a Tax ID number (EIN), a copy of the articles of incorporation, and a resolution identifying authorized signers if those names are not listed in the articles. Here is one example of the documentation that banks ask for.
Other Notable Requirements for Maintaining a Corporation in Indiana
- Indiana corporations must file a Business Entity Report with the Secretary of State every two years after your date of formation. The filing fee is $30, and the form can be filed online using the accessIndiana interface.
- Indiana requires certain documents to be kept at a corporation's principal place of business. The required documents are described in Chapter 52 of Article 1 of Title 23 of the Indiana Code.
Additional Steps and Information about Forming an S Corporation
- An S corporation has the same basic organizational structure as a regular corporation, but some of the tax advantages of a partnership or LLC. An S corporation pays no federal income tax, except for tax on certain capital gains and passive income. Instead, the corporation's profits and losses "pass through" to shareholders, and profits are taxed at individual rates on each shareholder's Form 1040. Certain requirements and additional obligations apply -- please see the S Corporation page for details.
- To form an S corporation, designate "S" status with IRS via Form 2553 within 2 months and 15 days of filing your articles of incorporation with Indiana. There is no additional paperwork that must be filed with Indiana to obtain "S" status.
- If the corporation has nonresident shareholders, you must withhold income tax at a rate of 3.4% on distributions to them. You can find instructions for how to do this withholding on page 3 of the S Corporation Income Tax Booklet. Exception: Some states have entered into a "reverse-credit agreement" with Indiana, which means that if a nonresident shareholder resides in Arizona, California, Oregon, or the District of Columbia, income tax does not need to be withheld.
- Indiana S corporations must file Form IT-20S - the Indiana S Corporation Income Tax Return (scroll through) every year.