Hawaii Processing Times and FeesLike most states, Hawaii has both standard and expedited processing times for handling your corporation's paperwork. To help you decide which option is best for you, see our list of the average wait times for both standard and expedited filings. Hawaii charges a corporation filing fee, and there's a small extra fee for the expedited option. To see all of Hawaii's fees, click “compare pricing” in our incorporation center.
Choosing Between a Hawaii S Corp and a C CorpAn S Corp is a special tax designation you can choose for your corporation. The limits on liability, structure, management and compliance documents are the same for both C Corps and S Corps.When choosing between the two, you should be aware of the following differences:
- 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 a special form with the IRS, called IRS Form 2553, Election by a Small Business Corporation.
Personnel RequirementsWhen you form your corporation, Hawaii requires that you meet the following personnel requirements:
- Minimum number of directors: Your corporation must have one or more directors.
- Age requirement: Directors of a Hawaii corporation must be at least 18 years old.
- Residency requirement: At least one director must live in the state.
Other Requirements for Your Articles of IncorporationThe 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 a person or business available during regular business hours to accept tax, legal and government documents on behalf of the business. Your registered agent must have a physical address in Hawaii. When you incorporate, can help you designate a registered agent.You must include your agent's name and address in your Articles of Incorporation. Here are other 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
Guidelines for Your NameYour Hawaii corporation needs a name that fits with your business purpose and fulfills the following 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.
Hawaii Corporate Taxes & ReportsAlthough 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.
Keeping Corporate Records and Ongoing Filing RequirementsYour Hawaii corporation must also 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.
- Meeting minutes:Your corporation's meeting minutes document the decisions and actions taken during shareholder meetings and board meetings.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.