Deciding on the form of legal entity (e.g., S corporation or LLP, sole proprietor or LLC) for your new or existing business can be a difficult decision and one of the most important decisions you will need to make as a business owner. However, once you have made the decision to incorporate, all that stands between you and a new form of legal entity for your business is a few simple steps.

Step 1: Decide who will do the incorporation. While in many cases it is a wise move, you are not required to use an attorney to incorporate your business. An attorney can provide more assurance that the incorporation process will be completed properly and can dispense valuable legal advice but expect to pay for this level of service, somewhere in the range of $700 to $1,000 (or more).

Doing the incorporation yourself -- while definitely cheaper than hiring an attorney -- can leave you feeling overwhelmed and uncertain if you've had little exposure to legal matters. The online incorporation service Mass corporation Filing (http://www.masscorporationfiling.com/), can provide a quick, easy and affordable alternative for those looking to incorporate. However, while these online services can be more than adequate for a sole proprietor incorporating his/her small business, because they don't offer legal advice, partnerships and new entities may want to consider getting additional legal advice before starting the incorporation process to protect against future disputes.

Step 2: Choose the name of your corporation. For existing businesses, choosing the name for your corporation may be as simple as adding "Inc." to the end of your business' current name. Most states require that "Corporation", "Incorporated", or an abbreviation such as "Corp." or "Inc." follows the corporate name. New businesses should check with the county clerk where they do business to ensure that the chosen name is not already being used.

Step 3: Select the state of incorporation. Although this seems like an obvious choice to many, in some instances, it can be beneficial to incorporate in another state. In making the decision of where to incorporate, three factors must be considered:

While small one-location offices usually are best off incorporating in the state where the business is located, some businesses choose to incorporate in states with very low or no corporate income tax, with Nevada and Delaware being the top choices. When making this decision, you should consult with a professional such as an accountant or attorney.

Step 4: Choose the corporations officers and directors. While jurisdictions will vary in their requirements, most states require that there be at least one director and two officers in a general for-profit corporation. In most cases, the required officers are President and Secretary, however, most states allow one natural person to hold both offices and be the sole director (as well as sole shareholder) of the corporation. Additional board members and officers can be elected at the first official corporate meeting, if necessary.

Step 5: File Articles of Incorporation and pay required fees. A corporation's "Articles of Incorporation" is the main filing document which begins the corporation's existence under state law. This document must be prepared and filed with the proper state authorities and the required filing fees, initial franchise taxes, and other initial fees must be paid. Filing requirements and fees vary by state.

Step 6: Hold the initial corporate meeting. The most important goal of the initial corporate meeting is to adopt the corporate bylaws -- the internal operating document for the corporation -- to complete the incorporation process. Your corporation's bylaws will detail the responsibilities, rights and duties of directors, shareholders and officers. These do not generally need to be filed with the state.

Step 7: Issue stock in the new corporation. In order for a corporation to be capitalized, shares of stock must be issued and distributed to the corporation's shareholder(s).

Step 8: Get federal and state identification numbers (if necessary). Now that your business is incorporated, you will be responsible for filing separate federal and state returns for the corporation. If you do not already have identification numbers with the required federal and state taxing authorities (if you are an employer, you may already have these numbers), you will need to get them before the first returns are due.