Documents Needed to Form an S Corp
Introduction
If you're considering forming an S corporation, you'll need to gather a few documents and forms before submitting your application. In this article, we have included all the necessary documents needed to form an S corporation.
Business License Application
A business license application is the first step to forming your S Corp. You will need to bring it with you when visiting the city clerk's office. The application will explain how much money is needed for your business, as well as how long it will take for them to process your request and grant the license.
The following information is required on this form:
- Name of Applicant(s) - First and last name with middle initial if applicable
- Address - Street number, street name (including apt., suite or unit), city and state when applicable
- Business Name - Name exactly as it appears on Articles of Incorporation (if applicable).
Application for Employer Identification Number (EIN)
You will need an Employer Identification Number (EIN). You can apply for one online at
https://www.irs.gov/businesses/small-businesses-self-employed/employer-identification-number-(ein).
It's free and you will need to provide your Social Security Number to the IRS. It is a good idea to apply for an EIN before you open your business because some states require it as part of their licensing process and others may ask you for it when you apply for a state tax number or unemployment insurance tax number.
Articles of Incorporation
As a business owner, you will be creating a new legal entity called a corporation. A corporation's owners are not considered to be part of it legally. This means that the liability for debts and actions of your corporation cannot attach to you as an individual (unless you personally agree to it). The Articles of Incorporation is the document that creates this legal entity and establishes your company as an independent business.
Bylaws
The bylaws are the rules of conduct for your corporation. They outline the roles and responsibilities of the board of directors and shareholders, as well as any shareholder restrictions or qualifications. The bylaws are adopted by the shareholders at their first meeting, which takes place after incorporation has been completed. Once adopted, they're not filed with any state agency; they're simply kept on file at the corporate office (usually in a binder).
Shareholder Agreements and Resolutions
Shareholder agreements and resolutions are important documents to have in any corporation.
Shareholder agreements: Shareholders should have a written agreement with each other, outlining the terms of their relationship. This can include how much each shareholder is contributing to the company, when they will receive dividends or other payments from the company, and how they can buy or sell shares of stock on the open market with other shareholders.
Shareholder resolutions: A shareholder resolution is required before incorporating an S Corp and must be adopted by all shareholders before filing articles of incorporation with your state government. It’s important that these resolutions are approved by all shareholders because some decisions are made by majority vote (for example, electing directors), while others require unanimous consent (for example, amending bylaws).
Operating Agreement
You will need to create an operating agreement, which is a document that defines the roles and responsibilities of each shareholder. It should also specify how profits are distributed to shareholders, as well as decisions like how the business will be run and what happens if someone wants to leave or die.
Takeaway
If you want to form an S corp, you'll need to assemble your corporate documents. These include your articles of incorporation, bylaws, shareholder agreements and resolutions, and operating agreements.
Conclusion
Of course, there are many other documents that you can use to form your S Corp. These are just some of the most common ones. It’s important to note that these documents will vary depending on the state in which you operate, so make sure you check with your local government before filing anything.
