Process of Registering a C Corporation
Corporations are the most common form of business structure in the United States, and they're used to handle many different types of business operations. Because of their inherent complexity, it can be difficult to navigate through the process of registering a corporation. This guide will walk you through each step in that process so that you can properly incorporate your company and get it up and running as soon as possible.
Choose a Business Name
Once you have decided on the type of entity, you must choose a business name. The name must be approved by the state and should not be too similar to an existing business. It is also important that your business name not embarrass, offend or mislead anyone who might encounter it in any way. Some examples of names that are unacceptable include:
- A name containing curse words or racial slurs
- A name suggesting that there is a connection between your company and someone famous (like “Donald Trump Construction”) or implying some sort of relationship with another person that does not exist (such as “John Smith Incorporated”).
There are several other factors to consider when choosing your company's legal name:
- The domain names relating to your company's legal business name may already be taken by another entity; if so, don't use them.
- Make sure all potential customers can easily spell and pronounce your company's legal business name without having to ask for clarification from someone else first; otherwise this will make it much harder for people who would like to do business with you.
File an Articles of Incorporation
You will file Articles of Incorporation, which is a legal document that establishes your corporation. This is similar to filing articles of incorporation for a limited liability company (LLC). You need to complete this form and submit it to the Secretary of State in order to create your business as a C corporation.
Once you've filed your Articles of Incorporation and paid any required fees, you can claim your new business as a C corporation. To do this, go online at the IRS website and use their Employer Identification Number (EIN) Request Tool to generate an EIN for your new business.
Appoint a Registered Agent
In order to register your business, you must appoint a registered agent. A registered agent is a person or business that has agreed to accept legal and tax documents on behalf of your company. Your C corporation will need one in every state where it does business.
Benefits of having a registered agent include:
- The ability to receive mail sent to your company at the address of its registered office in any state
- Reducing the risk for identity theft, which can happen when someone uses information about your business without permission
Comply with Corporate Formalities
You must maintain corporate records, which document the action taken at every shareholder and board meeting. You should also keep a copy of all minutes in case you need to refer back to any decisions or actions taken by your corporation.
You must keep up-to-date records of your shareholders, including their names and addresses as well as their purchase price for shares in your company. The same goes for board members and officers. If someone buys more than 50% of your company’s shares, you will have to file an amendment with the Secretary of State that includes this information about the new owner(s).
You must file annual reports each year with the Secretary of State’s office (where you registered) within 90 days after incorporating or amending its articles of incorporation; it should include:
- A statement showing how many directors there are; how often they meet; their respective powers, duties and tenures; who has access to books and records; whether they were elected by shareholders or appointed by someone else, if applicable; etc., plus a list of all current officers, directors and managers.
- A statement listing each person who owns stock worth more than $10 million dollars in value.
- Information about changes since last report (e.g., new officers/directors/shareholders).
You'll also need to create bylaws, which are the rules of operation for your corporation. These include things like how meetings will be conducted and what happens in the event of a tie vote. Most states don't require you to have bylaws, but it's a good idea to have them even if you get away without having to file them with the state; they're a valuable tool for managing your company's internal affairs and can help avoid problems that might arise down the line if disputes arise among shareholders or directors.
Issue stock certificates to Shareholders
When you're ready to issue stock, you'll need to do so in the form of certificates. You should have already determined how much each share is worth and what number of shares your corporation will issue. For example, if you decide that one share costs $5 and you want your company to sell 100 total shares, then each certificate will cost $5. In this instance, if a shareholder buys ten certificates at once (or "units"), he or she gets an 11% discount on the overall transaction price for these units ($4.50/unit).
The process of registering a C corporation is a multi-step process that involves the creation of a business plan, the filing of all necessary documents, and the payment of fees. It is an important step in starting your new business and will help you to secure your company's future.
The process of registering a C corporation is not as simple as it may seem. It is important that you understand the process and the type of business entity that is best suited for your needs. If you are interested in learning more about the corporate formalities required by law, then take a look at our article on this topic: "Corporate Formalities."