Should you form your corporation in Hawaii? We've collected the relevant information that will help you make this decision.
- Good quality of life
- High opportunity for new entrepreneurs
- Tax rate of 4.4-6.4%
- High cost of living
- Among "Worst States for Business" (Forbes 2016)
Cost of doing business
- $50 filing fee / $15 annual report
- Owner disclosure in annual report
Forming your corporation in Hawaii
In order to communicate to the public that your new business is incorporated, its official name will need to end with one of the following signifiers (or a relevant abbreviation): “incorporated”, “Company”, or “corporation.” In addition, it is required that the name of your business is not intentionally misleading to consumers, for any reason. Your company’s new name must also be completely unique, and not deceptively similar to any other organizations name or trademarks. There are also certain naming restrictions placed on financial institutions. Do a FREE name search now.
Board of directors requirements
You will need to form an official board of directors when incorporating in Hawaii. Here are the states explicit regulations regarding these directors:
- Required number of directors
Hawaii corporations must have at least one director for each shareholder, up until the third. There is no limit to the number of directors, but only three are required, no matter how many shareholders an organization has.
- Age restrictions
Directors of corporations located in Hawaii must be at least 18 years of age.
- Residence restrictions
There are no residence restrictions imposed on the directors of C corporations in Hawaii. However, S corporations are only allowed to have directors located in the United States.
- What information needs to be included in the Articles of Incorporation?
Hawaii does not require the names or addresses of directors to be disclosed in incorporation documents.
Requirements for the Articles of Incorporation
The Articles of Incorporation is a document that must be filed during the incorporation process in every state. Here is the information that must be included in this document when filing in Hawaii:
Hawaii requires the number of initial shares outstanding, and their par value, to be disclosed during the incorporation process. The number of outstanding shares does not affect initial state filing fees.
The state of Hawaii does not require officer information to be disclosed during the filing process.
Registered agent information
All Hawaii corporations must have a registered agent on file, and submit their name and address (which cannot be a PO box). This agent will be required to be accessible during standard business hours, and act as the state’s point of contact with the company. Learn more about registered agents.
If your business is a professional practice
Professional service corporations are permitted to form under the professional corporation (PC) structure.
Corporate record keeping requirements
Corporations in Hawaii are required to keep formal documentation of all major company decisions, financial documents, and shareholder information.
Hawaii corporate taxation and fee requirements
There are several tax and fee requirements that must be addressed by corporations in Hawaii. They are as follows:
All states have complex taxation requirements. For more information regarding taxes in Hawaii, it is advised that you visit the state’s official business related website.
Annual report requirements
Corporations in Hawaii are required to file an annual report every year before the end of the business quarter in which the company’s incorporation anniversary date falls. The cost of this filing is currently $15. Learn more about annual reports.
Tax identification numbers
Hawaii requires an EIN (employee identification number) for all corporations that will have employees, and most banks will require one to open accounts. Hawaii does not require corporations to obtain state tax ID numbers. Learn more about EINs.
Business license requirements
The business licenses and permits required in Hawaii vary wildly depending on the county or municipality in which your new corporation is located. If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.
S corporation election
Hawaii does not require a state-level S corp election, as they recognize any elections held at the federal level.
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