How to Form a C Corporation

When someone suggests you incorporate your business, they are referring to your forming a C corporation. This is the normal corporation anyone begins when they go into business. Taxation is under sub-chapter C of the Internal Revenue Code of 1986. The people who have formed the corporation are most often the owners of the business. They can also invite others to be shareholders and offer stock if they want.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• Forms specific to your state relating to forming a C corporation
• An adviser on corporate tax law

1. Contact the Comptroller of Public Accounts' office in your home state to get the necessary paperwork to form a C corporation.

2. Check into the filing fees and anything else that is involved while in contact with the Comptroller of Public Accounts. This will include a Certificate of Incorporation (also called Articles of Incorporation).

3. Decide on the basics. Choose a name for your new corporation. If there is going to be more than one member of the corporation, you must assign someone as the head of it. Will you open up the corporation to stockholders? If so, will you offer common or preferred stock?

4. Arrange to have minutes taken at stockholder and board of directors meetings. These notes are necessary for the official records.

5. Spell out all roles in the corporate bylaws. Check to see what other documents could be necessary. Many states require a financial report at the beginning. Also, the corporation will need to file its own tax return at the appropriate time.

Tips & Warnings

• The reason most often given for beginning a C corporation is to protect personal holdings.
• You should seek the advice of a corporation adviser for a streamlined process.
• A corporation can outlive its owners, so bear this in mind when electing new directors.

Resources

• Check with Cool Lawyer about legalities.
• Corporate.com has information about forming a C corporation.
• You can get other C corporation information on Law Depot.