Incorporate in Hawaii for FREE^*

Incorporation is the process of registering a business as a corporation and making it recognizable under law as its own legal entity. Incorporating a business can be a complicated process because each state has its own requirements for registering and operating a business as a corporation. Knowing the necessary steps and forms, however, will help keep you organized and stress-free. 

With our easy business registration service, you simply answer a few questions and we create your initial paperwork and file it with the state for you. The first business entity registration is free for Rocket Legal+ members—you pay only the state filing fees. Then, you can make and personalize all the legal documents you need for your business. Store everything online in your Rocket Lawyer account.

What is a C-Corp? 

A C-Corp, or C-Corporation, is a common business entity type. More specifically, a C-Corp is a corporation taxed under Subchapter C of the U.S. Code. Under Subchapter C, corporations are subject to tax at both the corporate and individual level (sometimes called “double taxation”). Depending on the situation, this may result in lower or higher tax burdens for the shareholders. 

C-Corps allow for anyone to be an investor and for an unlimited number of shareholders and multiple share classes.

As with other types of corporations, C-Corporations provide a common and well-known legal structure for businesses and offer their shareholders some limited liability. Except for certain instances of fraud or misconduct, a shareholder is not liable for the debts or obligations of a corporation beyond the shareholder's investment into the corporation.

Corporations are treated as a C-Corp by default, unless another type of tax treatment is selected, such as an S-Corp.

What is an S-Corp? 

Like C-Corps, S-Corps provide a common and well-known legal structure for businesses and offer their shareholders some limited liability. However, S-Corps have two main differences from C-Corps: they are taxed differently and they have more restrictions with shares.

An S-Corporation, or S-Corp, is an IRS election that allows a company to be treated like an LLC for income tax purposes, that is, as a “pass-through" entity. Instead of income taxes being owed at both the company and individual level, the income of an S-Corp is only taxed at the individual level, which means it passes through the company directly to the owners and shareholders. Again, this may result in lower or higher tax burdens for the shareholders depending on the situation.

S-Corps have more restrictions regarding shares and shareholders than C-Corps. Specifically, S-Corps can have no more than 100 shareholders, only one class of shares, and only U.S. residents or citizens as investors.

One area of common confusion is what type of entity can elect S-Corp status. Remember that this election is simply a tax choice, not a governance or legal structure choice. Both limited liability companies (LLCs) and corporations can choose S-Corp status if they qualify under the IRS's guidelines.

There are similarities between a Hawaii S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences in Hawaii, however, come down to the following:

• Ownership rules: An S-Corp is limited in terms of shareholders and stock class. It may have only one stock class and no more than 100 shareholders. Its shareholders must be United States citizens or legal residents. A C-Corp may have unlimited numbers of both shareholders and stock classes.
• Taxes: A C-Corp is taxed as a separate entity. It files taxes at the corporate level. Shareholders may also pay taxes on dividends they receive. An S-Corp is a "pass-through" entity. This means that it does not pay corporate taxes. Instead, income "passes through" to shareholders and is reported on their individual tax returns.
• Documents: When you file your Articles of Incorporation, you automatically become a C-Corp. To become an S-Corp instead, you must file IRS Form 2553, Election by a Small Business Corporation.

Your corporation’s name should be unique and make a statement about your business. Make sure it complies with the following Hawaii requirements:

• The words "Corporation," "Incorporated,” or "Limited" need to be part of your name. You may also use an abbreviation of one of these terms.
• Your name cannot be deceptive. It can't suggest a business that's different from your actual purpose. For example, a pet store should not call itself "All Things Mobile, Inc."
• The name must be unique. It can't be the same as, or too similar to, an existing business name already registered in Hawaii. 

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation.

Each state has its own personnel requirements for incorporating. In Hawaii, your corporation must have one or more directors and at least one director must live in the state. Also, directors of a Hawaii corporation must be at least 18 years old.

You do not need to list your directors' names and addresses in your Articles of Incorporation.

The Hawaii Department of Commerce, Business Registration Division sets a few other requirements for your Articles of Incorporation.

Every corporation needs to appoint a registered agent. This is the person or business available during regular business hours to accept tax, legal, and government documents on behalf of your corporation. Your registered agent must have a physical address in Hawaii. You must include your agent's name and address in your Articles of Incorporation. We can help you designate a registered agent when you incorporate with us.

 Here are a few other things to include in your Articles:

• The number of common shares your corporation is authorized to issue.
• The name and address of all incorporators.
• Your corporation's official name.
• Your corporation's principal mailing address.

Nearly every state has standard processing times, but not all provide expedited processing for corporations. In Hawaii, there are a few fees that you may be charged when you register your business as a corporation. They include the following:

State fee: $100.

• Fee to expedite your filing: $350.

Rocket Lawyer filing fee: $0 $99.99.

• First filing FREE* for Rocket Legal+ members (excluding state fees).
• Get additional filings HALF OFF with Rocket Legal+.

Processing time: 5-7 business days.

•  Expedited processing time: 1-3 business days.

Note: The above state fees and processing times (including expedited processing fees and times) are provided as a summary and may or may not encompass various fees mandated by your state or local authorities. Your state may also change these fees and processing times over time and without notice. If you have questions, speak to a Rocket Lawyer Business Pro to understand the costs and processing times that apply to your specific filing.

Businesses can save up to $2,500 per year with a Rocket Legal+^™ membership. This calculation is based on total savings on an initial business registration and registered agent, trademark, and business tax filing services for Rocket Legal+ members (a total cost of $924.97) compared to Rocket Legal members (a total cost of $1,949.96). This is in addition to savings on the average cost of 5 hours for document preparation by a non-Rocket Lawyer network attorney at the average attorney hourly rate in the U.S. of $300 (an estimated cost of $1,500 when purchased without any form of Rocket Lawyer membership) compared to unlimited use of customizable business documents for both Rocket Legal+ and Rocket Legal members at no extra cost.

Yes – although taxes are a chore, you will need to pay them for your new corporation. 

Before officially opening for business, you should apply for an employer identification number, or EIN, with the IRS. This number is similar to a Social Security number, but it's for businesses. Any business with employees needs one. 

Your corporation must file an annual report with the Hawaii Department Director by the end of the quarter in which it was incorporated. The report must reflect its affairs as of the first day of that quarter. For example, if a company incorporated during the second quarter of the year, between April 1 and June 30, it must file during that same quarter each year and report its affairs as of April 1. Your first report is due the calendar year after incorporation. This report must include the total number of authorized shares and their classes, along with the number of issued and outstanding shares in each class. 

You must also send an annual report to shareholders during the quarter of your business's incorporation anniversary. We have more information to help you understand the actual tax structure of a C-Corp and the tax structure of an S-Corp.

Your Hawaii corporation must create corporate records. These are the two most important ones Hawaii requires:

• Corporate bylaws: Bylaws are a document that formalizes your corporation's operating rules and structure. The bylaws must be consistent with the corporation's Articles of Incorporation and Hawaii law.
• Corporate minutes: Your corporation's Corporate Minutes document the decisions and actions taken during shareholder meetings and board meetings.

Both sets of documents help to protect the legality of your corporate status. You do not need to file either document with the state. Just keep them with your other corporate documents. Your corporation must also keep a stock book showing the names of all shareholders, along with the number of shares held by each and the date purchased.

We wish you success with your new Hawaii corporation! You can count on Rocket Lawyer for all the business, tax, and legal help you need at a price you can afford. 

If you are planning to operate in another state, you may need to register a corporation in that state. Rocket Lawyer can help you determine which states you should register in.

Other states may have their own rules for foreign corporations that originate in Hawaii or domestic corporations that also operate in Hawaii. Talk to an attorney to understand the legal and tax requirements for the state(s) in which you plan to operate.