Unit 2 · Business Formation

To conduct business in the United States, at some point you're going to run into the question: "What kind of business are you?" From getting paid to hiring contractors and employees, signing and enforcing contracts, to paying taxes—choosing the right business structure is essential. It can provide the scaffolding you need to operate within local, state and federal law and afford you a greater level of protection, efficiency, and money-making potential.

Sections
Status and Size
Business Structures
Unincorporated Structures
Incorporation
Other Considerations
Additional Structures and Resources

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Business structures are not one size fit all. Finding the right fit for your practice will depend on a variety of factors:

• Are you in business alone or do you have partners?

• Do you need to depend on employees or the occasional contractor?

• What kind of fundraising do you need access to?

• How can you reduce risk?

• ...and more!

If there were one business structure that was the answer for all of these questions—this would be a much shorter unit. There are literally hundreds of different ways to structure a business, it all comes down to how well it fits your needs.

Before we jump into the basic business structures, we need to first understand two factors: Status and Operating Size

Parts
Status: Employee vs. Self Employed
Operating Size

This will be covered more in-depth in the Representation and Labor unit, but understanding whether you are primarily an employee or an independent contractor is one of the most important factors in understanding which business structure is right for your business.

Employee
*"Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done.* This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed." (Source: irs.gov)
Independent Contractor (Self-Employed)
"The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done." (Source: irs.gov)

For example, say a costume designer is going to be hired to work on a limited run tv series. They could be hired as an employee of the production company. In this scenario, the designer would be on the company payroll, have their taxes withheld by the company, and would have access to the company's benefits (for example: health insurance). The employer, the production company, controls all aspects of the employee's work—including location, hours, wages, and providing tools and materials.

But if the production company would rather temporarily contract the costume designer as an independent contractor, then the designer will be self-employed. Now, the designer must invoice the company in order to get paid, they are responsible for their own taxes, and will not have access to compant benefits. This does allow the IC a certain level of freedom—they can choose the amount of time, rate of pay, etc.—the production company can only control the result of the work.

In the latter scenario, picking the right business structure can be key in saving money, limiting your personal liability (risk), and providing some continuity in how your business is run.

Operating size, in this instance, is referring to how many people are part of your company. Having 50 employees as a sole-proprietor can not only be cumbersome and extremely challenging, but also opens that person up to a large amount of risk. In contrast, running a one-person S Corporation may bog down an individual with too many bureaucratic responsibilities, outweighing the advantage of this more complex structure.

So, with each business structure, we need to take a moment to consider operating size. For this unit, we will use these three loosely defined sizes:

The individual is what it sounds like: a person operating their business entirely on their own. They might have one or two employees to help them out, but the operation of the business falls solely on them.

Think of a fine artist with a burgeoning studio practice; an actor with consistent work on the broadway scene; or a graphic designer who creates branding for small business.

Alumni Example: Claire Hentschker
clairesophie.com

For the small group, let's set that as a business that operates with anywhere from three to fifty people. Managing a group this size may require splitting of roles, and there may be more than one owner or partner in the business.

Think of an architecture firm working in a mid-size city; a recording studio that frequently hires session musicians; or an artist collective comprised of a changing roster of artists.

Alumni Example: Luca Damasco and Zach Rispoli (The Wick Editor)
wickeditor.com

Alumni Example: Kevyn McPhail (Oculus VR)
Kevyn McPhail | Oculus VR

Parts
Definition of a Business Structure
The Purpose of a Business Structure
Understanding Structures with F.O.R.C.E.
Structures Covered in this Unit

via the Farlex Financial Dictionary

The way a business is organized. The business structure states who owns the company, how profits are distributed and which managers perform what jobs. It is also important for tax and liability purposes, as companies are often taxed differently from each other and managers may have differing levels of responsibility in the event of wrongdoing or a lawsuit. In the United States, the three business structures recognized by the IRS are sole proprietorship, partnership and corporation. Other structures that are legally important (but not for tax purposes) include limited liability company, S-Corporation, and C-Corporation. [source]

Our working definition of business structure:

• The framework and/or legal establishment of an entity for conducting business.

• A business structure defines what the business is, but not necessarily what the business does.

• A business structure addresses questions like “Who owns the company?”, “How can I raise money?”, "Who is in control?" and “What taxes do I owe?”

• You will also hear the term business structure used interchangeably with “Business Entities,” “Organizational Structures,” “Operating Models,” “Business Licenses,“ and ”Business Types.”

Since we're taking the 20k foot view, we're going to focus on five higher level elements of business structures that will help us understand the advantages and disadvantages to each.

F.O.R.C.E.
Financial Setup	- What options are available to the business to bring in money? This may include debt financing, fundrasising, sales, equity, etc. - What is the financial or tax burden for the company?
Ownership	- Who owns the company? - What responsibilites do the owners possess?
Risk	- Whose assets (if any) are at stake? - Who has to take personal responsiblity if a problem arises? - What protections can be put in place?
Control	- How are business decisions made? - Who has functional control of business operations day-to-day? - Who has overall control of the total company?
Establishment	- What are the minimum legal requirements for forming this business?

Structure	Quick Definition
Sole Proprietorship	One individual or married couple in business alone.
Partnership	A General Partnership is composed of 2 or more persons (usually not a married couple) who agree to contribute money, labor, or skill to a business.
Limited Liability Company (LLC)	A Limited Liability Company (LLC) is formed by 1 or more individuals or entities through a special written agreement.
S Corporation (S Corp)	An S corporation, sometimes called an S corp, is a special type of corporation that's designed to avoid the double taxation drawback of regular C corps.
C Corporation (C Corp)	A corporation, sometimes called a C corp, is a legal entity that's separate from its owners. C Corps differ from S Corps primarily in their ability to sell Common Stock
Not-for-profit Organization	Nonprofit corporations are organized to do charity, education, religious, literary, or scientific work.

There are three types of business entities that you can operate under in the United States: a sole proprietorship, a partnership, and a corporation. We're going to cover corporations in section 4, as all corporations require the important step of incorporation.

Sole Proprietorships and Partnerships can be established and operated without the step of formal incorporation. These are default starting points for many small businesses.

Unincorporated Structures
Sole Proprietorship
Partnership

What is a Sole Proprietorship?

A Sole Proprietorship is one individual or married couple in business alone. Sole proprietorships are the most common form of business structure. This type of business is simple to form and operate and may enjoy greater flexibility of management, fewer legal controls, and fewer taxes. However, the business owner is personally liable for all debts incurred by the business. [source]

Sole Proprietorships are the default starting point. You engage in some business? Boom! You are automatically a sole proprietorship. You have complete control over your business and the profits, but you also have all of the risks and losses.

F.O.R.C.E.	Sole Proprietorship
Financial Setup	- Profits are taxed once. It’s all personal income tax. - Profits belong entirely to the owner. But so do the debts... - Ability to raise funds is limited to personal capital, personal gifts, and loans. - Can you sell part of your business? No. Legally, a Sole Proprietorship can only have one owner. If you want additional owners, you must incorporate.
Ownership	Singular owner. You're the boss, buddy. - No legal distinction between business and the owner. - You cannot transfer ownership.
Risk	- Sole Proprietorships carry the largest level of risk. Because there is no seperation between the business and the owner, your business assets and personal assets are the same. - Unlimited Liability. You and you alone are responsible if anything happens.
Control	Singular owner. You're the boss, buddy.
Establishment	While there are not necessarily mandatory requirements to start a Sole Proprietorship, there are best practices like having a business banking account and sometimes you will need industry-specific licenses or permits.

Partnerships are just what they sound like: two or more partners. Sharing the burden, sharing the success and sharing the losses. This is the second easiest business structures to form and provides for a great deal of control, but like sole proprietorships comes with a decent amount of risk.

We're going to cover two types of partnerships: General Partnerships and Limited partnerships.

What is a General Partnership?

A General Partnership is composed of 2 or more persons (usually not a married couple) who agree to contribute money, labor, or skill to a business. Each partner shares the profits, losses, and management of the business, and each partner is personally and equally liable for debts of the partnership. Formal terms of the partnership are usually contained in a written partnership agreement. [source]

What is a Limited Partnership?

A Limited Partnership is composed of one or more general partners and one or more limited partners. The general partners manage the business and share fully in its profits and losses. Limited partners share in the profits of the business, but their losses are limited to the extent of their investment. Limited partners are usually not involved in the day-to-day operations of the business. [source]

F.O.R.C.E.	General Partnership	Limited Partners
Financial Setup	- Profits pass directly to the partners -Each partner is responsible for their own personal taxes - Like Sole Proprietorships, ability to raise funds is limited to personal capital, personal gifts and loans.	- Profits are distributed to partners according to a partnership agreement. - Taxed once. Tax responsibiltiy corresponds to level of ownership. - General Partners pay self-employment tax
Ownership	- Requires two or more people - Ownership is automatically a 50/50 split unless spelled out in a partnership agreement. - Ownership could transfer to new partners (depending on the partnership agreement.)	- Requires two or more people. - There are two types of partners: General Partners (Major) and Limited Partners (Minor). - Ownership and transfers are defined by the partnership agreement(s).
Risk	- Unlimited personal liability for partners. - Partners are liable for each other's actions!	- Unlimited personal liability for General Partners. - Limited liability for the limited partners. - Limited partners may have a limited say in what the business does, but they likewise have limited risk.
Control	- The partners are in charge. - Control is automatically a 50/50 split unless spelled out in a partnership agreement. - There are laws (vary state to state) that govern what a partner is able to do on behalf of the partnership.	- Most often the General Partners are in charge, but Limited Partners do have some say in business operations. A partnership agreement would spell this out. - There are laws (vary state to state) governing what a General and/or Limited partner can do.
Establishment	- Like a Sole Proprietorship, there are not necessarily mandatory requirements to start - The absolute best practice is to have a written partnership agreement in place! Makes the rules clear!	- Adding a limited partnership must be done through a written partnership agreement to outline who is a General Partner and who is a Limited Partner.

Whereas sole proprietorships and partnerships can be formed instantaneously with a simple agreement, we're now crossing into the world of incorporation. The rest of the business structures we're going to cover have very specific filing and formation requirements.

What is a Corporation?

A Corporation is a more complex business structure. A corporation has certain rights, privileges, and liabilities beyond those of an individual. Doing business as a corporation may yield tax or financial benefits, but these can be offset by other considerations, such as increased licensing fees or decreased personal control. Corporations may be formed for-profit or nonprofit purposes. [source]

To incorporate is to create a separate entity that could exist independent of the people who originally founded it. (For example: What happened to KFC after Colonel Sanders died?)

This gets into the concept of Corporate Personhood

Corporate personhood is the legal notion that a corporation, separately from its associated human beings (like owners, managers, or employees), has at least some of the legal rights and responsibilities enjoyed by natural persons. [Source]

It's all about creating a layer of separation and protection.

Incorporation is a legal process that must be done through the government. Unlike a Sole Proprietorship or Partnership, you cannot create an incorporation on your own. Articles of Incorporation must be filed. Sole Proprietorships and Partnerships can be incorporated.

Incorporated Structures
Limited Liability Company
S Corporation
C Corporation
Non-Profit Organization

What is a Limited Liability Company?

A Limited Liability Company (LLC) is formed by 1 or more individuals or entities through a special written agreement. The agreement details the organization of the LLC, including provisions for management, assignability of interests, and distribution of profits and losses. LLCs are permitted to engage in any lawful, for-profit business or activity other than banking or insurance. [source]

F.O.R.C.E.	LLC
Financial Setup	- Profits pass to members according to the operating agreement. - Profits are taxed once as personal income tax. You'll hear this referred to as pass-through income. - In addition to loans, personal gifts and personal capital, LLCs can sell percentages of ownership in the company (Please note: this is not the same as common stock!). Think of the show Shark Tank—the investors are buying an entire portion of the company that is pitching a product.
Ownership	- One or more people can own. - Percentages of ownership spelled out at incorporation. - Transfer of ownership to others is possible.
Risk	- LIMITED (finally). With an LLC, personal assets are considered separate from business assets. (i.e. if you get sued, they can't go after your personal assets like your house or car) LLCs are popular business structures because of the protections and flexibility they offer.
Control	- Decisions can be made by owners or by appointed members (employees, agents, etc). - Decision-making and management would be best defined by an Operating Agreement.
Establishment	- You must file Articles of Incorporation with the state government in which your business resides. - The rules are different state to state.

An S corporation, sometimes called an S corp, is a special type of corporation that's designed to avoid the double taxation drawback of regular C corps. S corps allow profits, and some losses, to be passed through directly to owners' personal income without ever being subject to corporate tax rates. [source]

F.O.R.C.E.	S Corp
Financial Setup	- Taxed once (as opposed to C Corp). - Tax responsibility passes to individual owners. - Individuals pay income taxes. - S Corp can sell up to 100 shares of owner's equity.
Ownership	- One or more people. But limited to 100 shareholders. - Transfer of ownership possible.
Risk	- Risk is more limited than LLC, but not entirely risk-free. - Personal assets are considered separate from business assets. - S Corp’s are popular to investors because of these protections.
Control	- Board members and appointed officers.
Establishment	- File Articles of Incorporation + Bylaws with the state government. - Essentially the same as a C Corp with some exceptions. - Plus additional filing for Article S with the IRS.

What is a C Corporation?

A corporation, sometimes called a C corp, is a legal entity that's separate from its owners. Corporations can make a profit, be taxed, and can be held legally liable. [source]

F.O.R.C.E.	C Corp
Financial Setup	- Profits are taxed TWICE. The corporation pays corporate taxes. Individual owners pay personal income taxes on their profits. This is the major drawback of a C Corp. - In addition to loans, startup capital and investments, C Corporations can sell limited ownerships in the company through the issuance of common stock.
Ownership	- One or more people can own. - Initial percentages of ownership spelled out at incorporation. - Transfer of ownership to others is possible. - Additional, limited owners can be added through the selling of common stock.
Risk	- Personal assets are considered separate from business assets. - C Corp’s are popular to investors because of these protections. Risk is the most limited! - C Corp's are literally considered separate entities.
Control	- Board members and appointed officers have control of the company. This is spelled out in the Articles of Incorporation and Corporate Bylaws. - Depending on the industry, there are a LOT of state and federal laws and regulations to follow.
Establishment	- You must file Articles of Incorporation with the state government in which your business resides. The rules are different state to state. - Additionally, you must create Corporate Bylaws (rules of the corporation). While not required, it is nearly impossible to run a C Corp without bylaws.

What is a Non-Profit Corporation

Nonprofit corporations are organized to do charity, education, religious, literary, or scientific work. Because their work benefits the public, nonprofits can receive tax-exempt status, meaning they don't pay state or federal taxes income taxes on any profits it makes. [source]

F.O.R.C.E.	Not-for-profit
Financial Setup	- Because of their charitable mission, non-profits do not pay income tax. - Additionally, when someone makes a charitable gift to a non-profit it is considered a gift, not an investment. Gifts do no grant ownership the way that an investment or stock purchase does. - There are no profits as well! All profits must go back into the organization to pay for programs and salaries, etc.
Ownership	- Technically not owned in the traditional sense. Non-profits are considered public charities and are intended to have lives beyond their founders. This is Important to remember. When you form a non-profit you are surrendering ownership to a corporate entity.
Risk	- Personal assets are considered separate from business assets. Very low personal risk! This is why many creative practices from non-profits (we will discuss in future units why this is not always the best strategy).
Control	- One or more appointed officers + a board of directors for oversight. All non-profits have a board. They are responsible for general governance of the organization. - There are a ton of rules and regulations to follow. Non-profit status can be rescinded if the organization does not adhere to legal guidelines.
Establishment	- You need a minimum of three board members to form a nonprofit! - File Articles of Incorporation + Bylaws with the state government. - Plus additional filing with the Internal Revenue Service.

Many types of business in the US require additional licenses in order to operate. Your business may need to pay a fee and aquire a license if your business activity involves regular activities that are regulated by the federal and state government.

A few examples include:

• Sale of alcohol
• Radio and television broadcasting
• Conducting auctions
• Construction
• Retail sales

Here is a guide to Federal licenses and permits via the US Small Business Administration

• Acquiring a license usually involves submitting an application to the agency that oversees the regulations—for example, for alcohol sale you must acquire a license from the Alcohol and Tax Trade Bureau as well as the local Alcohol Beverage Control Board.
• Some licenses are for limited periods of time and must be renewed.
• There is usually a fee associated with a license. Some license fees can be tens of thousands of dollars, so it is important to do your research! Local chambers of commerce are good sources.

Most business structures can be changed to suit growth or the changing needs of a business.

• Most changes can be done through an updated operating agreement and re-incorporating with your state government.
• Major changes—such as taking a C Corp to an LLC—are strictly controlled by state and federal government. This is due to complicated regulations designed to prevent fraud.

Not all businesses need to last forever. There are a number of reasons people choose to create temporary or limited business entities.

Single-Purpose Businesses

• In you want to transfer the ownership of an extremely risky property away from your personal assets, you could create a single-purpose business. The single purpose is owning the asset.
• This is very common in real estate but is becoming more prevalent in creative practices to manage intellectual property.

Temporary Businesses

Let's say that you are a costume designer hired to work on a big budget film. The producers want you to source the costume assistants, dressers, asset managers... they want you to build out a team.

• In this case, you could form a temporary LLC—one that expires when the film is complete.
• This is extremely common in the performing arts, giving individuals the ability to team up and share profits, but also limit their exposure and liability.

The business structures covered above are far and away to most common in US business, but there are many more structures available (though not all are recognized in all 50 states).

Here are just a few:

• Association
• B Corps or Benefit Corporations
• Cooperatives
• Close corporations
• Family Limited Liabilty Company
• Franchises
• Joint Stock Company
• Joint Ventures
• Limited Liability Partnership
• Limited Liability Limited Partnership
• Low-profit Limited Liability Company
• Trust
• Syndicate

Here are some sites that I have found easy to comprehend and that further define the concepts from this unit.

• "What is a Business Model? Business Models Explained" - Bplans.com
• "Choose a Business Structure" — The U.S. Small Business Administration
• "Choose Your Business Structure" — Entrepreneur.com
• "Business Structures" - The U.S. Internal Revenue Service
• "Small Business" — USA.gov
• "Starting a Business Basics" - Getting Your Sh*t Together
• "How to Start a Nonprofit" — National Council of Nonprofits
• "How to Start an LLC" — howtostartanllc.org Note: This site has guidance on how to form an LLC for each state (They're all different!)
• "When to Set Up a Corporation or Other Business Entity" — Arts Tax Info
• "Sweat The Business Stuff: What Type Of Business Are You Running Anyway?" — The Legal Artist

Below you'll find comparison tables for each of our elements of FORCE. Keep in mind, as with everything in this course, this is a 20k foot view. When considering which business structure to choose for your practice, it's best to consult with mentors, people within your network, and business professionals.

FINANCIAL SETUP
Sole Proprietorship	- Profits are taxed once. It’s all personal income tax. - Profits belong entirely to the owner. But so do the debts... - Ability to raise funds is limited to personal capital, personal gifts, and loans. - Can you sell part of your business? No. Legally, a Sole Proprietorship can only have one owner. If you want additional owners, you must incorporate.
Partnership (General)	- Profits pass directly to the partners -Each partner is responsible for their own personal taxes - Like Sole Proprietorships, ability to raise funds is limited to personal capital, personal gifts and loans.
Partnership (Limited)	- Profits are distributed to partners according to a partnership agreement. - Taxed once. Tax responsibiltiy corresponds to level of ownership. - General Partners pay self-employment tax
Limited Liability Corporation (LLC)	- Profits pass to members according to the operating agreement. - Profits are taxed once as personal income tax. You'll hear this referred to as pass-through income. - In addition to loans, personal gifts and personal capital, LLCs can sell percentages of ownership in the company (Please note: this is not the same as common stock!). Think of the show Shark Tank—the investors are buying an entire portion of the company that is pitching a product.
C Corp	- Profits are taxed TWICE. The corporation pays corporate taxes. Individual owners pay personal income taxes on their profits. This is the major drawback of a C Corp. - In addition to loans, startup capital and investments, C Corporations can sell limited ownerships in the company through the issuance of common stock.
S Corp	- Taxed once (as opposed to C Corp). - Tax responsibility passes to individual owners. - Individuals pay income taxes. - S Corp can sell up to 100 shares of owner's equity.
Not-for-Profit	- Because of their charitable mission, non-profits do not pay income tax. - Additionally, when someone makes a charitable gift to a non-profit it is considered a gift, not an investment. Gifts do no grant ownership the way that an investment or stock purchase does. - There are no profits as well! All profits must go back into the organization to pay for programs and salaries, etc.

OWNERSHIP
Sole Proprietorship	Singular owner. You're the boss, buddy. - No legal distinction between business and the owner. - You cannot transfer ownership.
Partnership (General)	- Requires two or more people - Ownership is automatically a 50/50 split unless spelled out in a partnership agreement. - Ownership could transfer to new partners (depending on the partnership agreement.)
Partnership (Limited)	- Requires two or more people. - There are two types of partners: General Partners (Major) and Limited Partners (Minor). - Ownership and transfers are defined by the partnership agreement(s).
Limited Liability Corporation (LLC)	- One or more people can own. - Percentages of ownership spelled out at incorporation. - Transfer of ownership to others is possible.
C Corp	- One or more people can own. - Initial percentages of ownership spelled out at incorporation. - Transfer of ownership to others is possible. - Additional, limited owners can be added through the selling of common stock.
S Corp	- One or more people. But limited to 100 shareholders. - Transfer of ownership possible.
Not-for-Profit	- Technically not owned in the traditional sense. Non-profits are considered public charities and are intended to have lives beyond their founders. This is Important to remember. When you form a non-profit you are surrendering ownership to a corporate entity.

RISK
Sole Proprietorship	- Sole Proprietorships carry the largest level of risk. Because there is no seperation between the business and the owner, your business assets and personal assets are the same. - Unlimited Liability. You and you alone are responsible if anything happens.
Partnership (General)	- Unlimited personal liability for partners. - Partners are liable for each other's actions!
Partnership (Limited)	- Unlimited personal liability for General Partners. - Limited liability for the limited partners. - Limited partners may have a limited say in what the business does, but they likewise have limited risk.
Limited Liability Corporation (LLC)	- LIMITED (finally). With an LLC, personal assets are considered separate from business assets. (i.e. if you get sued, they can't go after your personal assets like your house or car) LLCs are popular business structures because of the protections and flexibility they offer.
C Corp
S Corp
Not-for-Profit

CONTROL
Sole Proprietorship	Singular owner. You're the boss, buddy.
Partnership (General)	- The partners are in charge. - Control is automatically a 50/50 split unless spelled out in a partnership agreement. - There are laws (vary state to state) that govern what a partner is able to do on behalf of the partnership.
Partnership (Limited)	- Most often the General Partners are in charge, but Limited Partners do have some say in business operations. A partnership agreement would spell this out. - There are laws (vary state to state) governing what a General and/or Limited partner can do.
Limited Liability Corporation (LLC)	- Decisions can be made by owners or by appointed members (employees, agents, etc). - Decision-making and management would be best defined by an Operating Agreement.
C Corp	- Board members and appointed officers have control of the company. This is spelled out in the Articles of Incorporation and Corporate Bylaws. - Depending on the industry, there are a LOT of state and federal laws and regulations to follow.
S Corp	- Board members and appointed officers.
Not-for-Profit	- One or more appointed officers + a board of directors for oversight. All non-profits have a board. They are responsible for general governance of the organization. - There are a ton of rules and regulations to follow. Non-profit status can be rescinded if the organization does not adhere to legal guidelines.

ESTABLISHMENT
Sole Proprietorship	While there are not necessarily mandatory requirements to start a Sole Proprietorship, there are best practices like having a business banking account and sometimes you will need industry-specific licenses or permits.
Partnership (General)	- Like a Sole Proprietorship, there are not necessarily mandatory requirements to start - The absolute best practice is to have a written partnership agreement in place! Makes the rules clear!
Partnership (Limited)	- Adding a limited partnership must be done through a written partnership agreement to outline who is a General Partner and who is a Limited Partner.
Limited Liability Corporation (LLC)	- You must file Articles of Incorporation with the state government in which your business resides. - The rules are different state to state.
C Corp	- You must file Articles of Incorporation with the state government in which your business resides. The rules are different state to state. - Additionally, you must create Corporate Bylaws (rules of the corporation). While not required, it is nearly impossible to run a C Corp without bylaws.
S Corp	- File Articles of Incorporation + Bylaws with the state government. - Essentially the same as a C Corp with some exceptions. - Plus additional filing for Article S with the IRS.
Not-for-Profit	- You need a minimum of three board members to form a nonprofit! - File Articles of Incorporation + Bylaws with the state government. - Plus additional filing with the Internal Revenue Service.