How to Form a C Corporation in the US

Introduction

If you want to open a new business, you have a few different options for how to structure that business. One of the most popular choices is to become a C corporation. A C corporation is a legal entity that can own property and enter into contracts on its own behalf, meaning that it's separate from its owners in many ways. It's also more complicated than other types of businesses because you need to follow strict incorporation procedures and pay annual fees in order to maintain your status as an official business entity. However, by following these steps carefully and correctly setting up your company, you'll be well on your way toward forming a successful corporation.

Choose a Name

You can choose a name that is not already in use, one that does not mislead, one that is easy to remember, and one that has not been used by another corporation. You should also avoid confusion with the name of a competitor or any similar entity. A corporation's name may be different from its trade name (which may appear on stationery and other business documents) if the company has registered its trade name. The registration must be made before starting operations under this business name.

Make Sure the Name is Available

If you have not yet picked a name for your company, there are a few things you should keep in mind. Before choosing a name, check that it is available. This can be done by searching the US Patent & Trademark Office database or by calling your state's secretary of state or department of corporations. You will also want to make sure that you have not chosen a name that is too similar to other companies because this could cause confusion when customers try to find your business. Remember: if someone else has already used the same name for an existing business in another state (or country), then yours may be considered as infringing on their trademark rights and therefore be subject to legal action from them.

Decide where you will Base your Company

It's important to choose a state that is right for your business. The state should have an economy that works with your business model, and the tax laws should be in line with how you want to run your company. For example, California has high taxes but many resources available in the state; it may be a good choice if you're planning on doing business in many different states as well as California. You should also consider whether or not there are any other regulations that could affect your company or its practices before deciding on where it will base itself. For example, if you're looking into manufacturing goods overseas and selling them on the internet here in America, then Illinois might not be the best fit because they have strict rules about what kinds of goods can be shipped from out of state sellers directly into consumers' homes without paying sales tax first (this includes things like electronics).

File the Paperwork

Once you’ve decided to form a C corporation in the US, you need to file the paperwork with your state.
  • File a certificate of incorporation. This is the document that officially starts your business and allows you to do things like open bank accounts and apply for insurance policies. It usually takes around 10 days to be approved after filing, but it can take longer if any problems arise during the process.
  • Apply for an EIN (Employer Identification Number) from the IRS (Internal Revenue Service). You will use this number whenever you interact with them as an employer; it’s also used when filing taxes or other forms related to your company.
  • If your business will operate within one city or county, then you should also apply for a business license there too:..

Create Corporate Bylaws

Corporate bylaws are a set of rules that govern how the company will be run, including how decisions are made and who has power over what. The board of directors is responsible for creating the corporate bylaws, but they must be approved at an annual meeting (or special meeting) before they become effective. It's important to have corporate bylaws in place because they define the relationship between shareholders and directors, which helps protect shareholders from liability in case something happens while they're acting on behalf of the corporation. They also help ensure that all members of your organization know what their responsibilities are so everything runs smoothly from day one—and into future years.

Hold a Meeting

The board of directors is the highest level of authority in your corporation. The board consists of shareholders, who are called directors. Directors have to meet at least once annually to discuss business matters and make decisions that affect the company as a whole, but they don't have to meet more than once every third year.

Prepare Corporate Minutes of this Meeting

Corporate minutes are the record of the corporate decision-making process. They include information about who was present at the meeting, what happened during the meeting, and who made decisions or resolutions on behalf of your corporation. You'll want to review your corporate minutes carefully before sending them to anyone outside your company (including employees). The following information should be recorded in all corporate minutes:
  • The date and place of the meeting
  • A list of all members who were present (and their numbers) as well as those not able to attend due to illness or travel plans
  • All actions taken by directors and officers during this meeting
  • Any changes implemented by directors and officers

Issue Stock Certificates

Issue stock certificates to shareholders. A stock certificate is the way you issue shares to your shareholders. You’ll want to make sure that you have the following information on each share:
  • Name of the company (this will be the name of your C Corporation)
  • Number of shares issued and outstanding (e.g., 100,000 shares)
  • Name(s) and address(es) of shareholder(s), along with a signature line for each shareholder

Takeaway

You can create a corporation on your own, but make sure to follow all the steps mentioned in this article

Conclusion

We hope that this guide has helped you understand how to create a C corporation in the US. Although the process can seem intimidating at first, it’s actually not too difficult if you follow all the steps carefully. Once your company is set up and ready to go, we encourage you to contact us so we can help take care of your monthly bookkeeping and tax filing needs!
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