How to start a Hawaii corporation

It might seem like a lot at first, but once you understand the steps, it’s very doable. This guide will walk you through everything you need to know to start your Hawaii corporation.

How to start a corporation in Hawaii

Incorporating means registering your business as a corporation so the law sees it as its own entity, separate from you. Each state has its own rules for how to do this, so the process can seem confusing. Let’s go through each step: 

1. Choose a name for your Hawaii 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.

2. Decide between a Hawaii S-Corp and C-Corp tax designation

There are similarities between a Hawaii S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences, 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.

3. Appoint directors and shareholders for your Hawaii 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.

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have a Hawaii address) or choose one to do that service for you (if you are not located in Hawaii or would like an extra layer of privacy).

5. File your Articles of Incorporation with the state of Hawaii

Once you have a business name and registered agent, you can register your business as a Hawaii corporation with the state by filing your Articles of Incorporation. This document may be referred to in other states as "Certificate of Organization," "Certificate of Filing," or "Articles of Organization."

6. Get an Employer Identification Number (EIN)

Before opening your doors for business, apply to the IRS for an employer identification number, or EIN. All corporations with employees in Hawaii must have an EIN. An EIN is similar to your Social Security number, but it's for businesses. You'll also need an EIN to open your corporate bank account.

Congratulations! After you have completed all these steps, you have formed your Hawaii corporation.

What to do after incorporating in Hawaii

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.

Still have questions? Learn more about how to start your own business with Rocket Lawyer and get started today!
 

Key takeaways Starting a corporation in Hawaii means following state rules, like choosing a unique name, filling out paperwork, and paying fees to make it official. One important choice is deciding how your corporation will be taxed in Hawaii, either as an S-Corp or a C-Corp. This affects how the business and owners pay taxes, and the differences between the two change from state to state. After forming the corporation, it’s recommended to keep records – like Bylaws and Meeting Notes – to stay in good standing with the state and prove your business is real and operating correctly.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a corporation?
• What is an S-corporation?
• How are corporations taxed?
• How to start a corporation
• How to register a corporation by state