A corporation is an independent legal entity that is formed as a means to operate as a business. As a legal entity distinct from its owners, the corporation is responsible for all of its own liabilities and obligations. Generally, this means that the owners are not personally responsible for paying off those debts. As a result, corporations can be a very attractive type of business organization to form. A C Corporation is a type of corporation that is taxed a certain way under the tax code. All corporations that do not apply for special status are C-Corps. A corporation is formed under state law, so there are several documents you would need to file at the state and federal levels to successfully form the corporation.
Pick Corporate Name
Once you have decided to form a corporation, the first step you will need to take is to pick a name. The name generally must include a term signifying the business is a corporation, such as Inc. or Corp. The name must also not be in use by any other corporation in the state where you incorporating. The state will generally provide an online database you can search to determine if the name you want to use is available. In addition, you should consider checking with the U.S. Patent and Trademark Office to see if any other business has established a legal claim to the name your corporation wishes to use.
Articles of Incorporation
Articles of incorporation are the formal documents that a business must file with the state where it is headquartered to become a corporation. While the process for incorporation varies by state, generally you will need to file the document with the secretary of state. The state will provide blank articles-of-incorporation forms for you to fill out. While the required content of the articles will vary by state, generally you must provide the name of the business, the identity and address of an agent who can receive legal documents on behalf of the business, how much stock will be issued by the corporation, and the identities and addresses of the people founding the business. You will also generally be required to pay the state a fee to incorporate.
Employer Identification Number
The employer identification number (EIN) is the business equivalent of a personal Social Security number. The EIN establishes the business’s identity with the IRS and will be used when the corporation files its tax documents. A business can obtain an EIN immediately by applying with the IRS online.
Licenses and State Taxes
Once you have filed the articles of incorporation and obtained an EIN, you have officially formed a corporation. However, you may need to make additional filings for the corporation to actually operate. Some industries, such as child care and debt collection, require that a business obtain a license before it can operate. Also, states and cities may also require that a business register with its tax agencies before the corporation can do business in those locations.