Corporations with shareholders and a board of directors use the C corporation business structure because their personal assets are protected as well as the benefit of not losing more money than they invest into the company. Other benefits to the C corporation include the ability to have employee benefits such as health care be considered a cost of business giving the company a deductible tax break. This type of business structure is ideal for a company looking to alleviate income tax and accumulate more working capital.
Things You'll Need
- EIN number
- DBA name
- Business license
- Article or certificate of incorporation (state to state)
- Attorney (if applicable)
Call the IRS about the status of your EIN (Employer Identification Number) before filling out any paperwork for a corporation. Ask if your EIN is valid and in their database, it usually takes two weeks from the time you file for your EIN for it to be recognized by the IRS.
Check your status on your DBA (Doing Business As) name to make sure that everything is free and clear. This is an important step as you do not want to file a corporation under another company name.
Make sure that your local business license is legal in the city of your business. Be sure it is valid and that other local licenses will not be needed.
Collect all information needed to start the incorporating process. It would be best to hire a attorney who works in this type of field to guide you through the process but you can file on your own also. You will need to know if you are incorporating in the state you are living in or out of state. Contact the Secretary of State and ask about filing your corporation and if you have multiple shareholders you will need a buy-sell agreement.
Set times to have meetings with your board of directors in accordance with your corporation; your attorney will have to attend your annual state filing. The meetings should be held at least once a month. Document or record each meeting in dated order and keep them safe.
Appoint officers in the company with the board of directors. The directors manage the company and the officers run the daily operations of said company.