Online filing is a convenient way to start a business—but incorporating online isn't for everyone. Let's take a look at a few factors to look at to determine whether online filing is the best choice for you.

Is online filing available in your state?

Not all states offer online filing; for example, New York does not allow businesses to incorporate online.

If online filing is available, does it cost extra?

Many states that offer online filing, such as Texas and Florida, charge the same fee to incorporate online as they charge to mail in a check along with your Articles of Incorporation. In fact, in these two examples, online filing is the default type of filing; paper forms are provided as a courtesy for those who are more comfortable mailing documents.

However, there are other states—most notably Minnesota and Illinois—that treat online filings as expedited request. What does this mean to you? If you choose to incorporate online, you'll pay a higher filing fee, and in return your Articles of Incorporation will be filed within 24 hours (rather than the standard filing time of around one week). Expedited filing fees for incorporating online can range from $10 to $100 or more; it's important to check before incorporating online whether an expedited fee will be added to your filing.

Do your Articles of Incorporation require any special clauses?

Many states require a standard business purpose, and this requirement is typically filled by the phrase "any and all lawful purposes for which corporations may be incorporated under" or simply "any legal purpose." (In many states, this statement is already printed in the purpose statement section of paper-copy Articles provided by the state.)

However, while state-provided Articles of Incorporation have been drafted to ensure compliance with the Secretary of State's office, they are not guaranteed to comply with other government agencies you might do business with. If you plan to conduct business in a regulated industry, for example, a general business purpose statement may not be sufficient. Additionally, a new article or clause entirely may need to be added.

Many online filings provided by the state are simpler in format than their paper-copy counterparts, and some states' online incorporation services do not allow the default general purpose statement to be modified. If you find that your business does need a more specific purpose statement or additional articles, incorporating online may not be an option for you; you may need to draft your own Articles to include the extra information and mail them in for filing.

Will your corporation issue multiple classes of stock?

Many corporations issue only one class of stock, in which all shareholders have the same voting powers. (S corporations, in fact, are required to have only one class of stock.) But C corporations have the option of multiple classes of stock, which enables more of a tiered structure of voting powers.

Just as with the purpose statement or additional clauses above, incorporating online does not always provide the flexibility to add multiple classes of stock. Illinois, for example, specifies that only one class of stock is available for online filings.

If your Articles of Incorporation are highly specialized, incorporating online may not be the best option for you. But if your corporation has a simple, basic structure, does not require multiple classes of stock, and is not involved in a regulated industry, online filing can be a convenient option with a fast turnaround.