A C corporation is a type of business entity with advantages and disadvantages. Perhaps the biggest advantage is that a C corporation can ultimately become a publicly traded business, enhancing its growth potential. The biggest disadvantage is that a C corporation is subject to double taxation. This means that the profits of the corporation are first taxed at the corporate level and then the shareholders are personally taxed once the profits are distributed. Nevada has specific requirements for individuals wishing to form a C corporation.
Your business must have a name that distinguishes it from the names of all other businesses currently registered with the Nevada Secretary of State. In addition, the business name must include a corporate ending, such as Incorporated, Inc., Limited, Ltd., Company, Co., Corporation or Corp. You can search a name to see if it has already been registered with the Nevada Secretary of State by using the Business Entity Search function on the Nevada Secretary of State homepage.
Articles of Incorporation
You must fill out and file certain documents with the Nevada Secretary of State. These documents are called Articles of Incorporation and are sometimes simply referred to as "the articles." Articles of Incorporation may be filed at the address below along with a filing fee. The fee is dependent on the number of authorized shares. Up-to-date fee information can be found on the Nevada Secretary of State homepage. Secretary of State New Filings Division 204 North Carson Street, Suite 4 Carson City, NV 89701-4520
Registered Agent and Incorporator
Each corporation must have a registered agent serving as a point of contact to receive legal and government documents, such as service of process, tax notices and annual reports. Thus, the Articles of Incorporation must include the name of a registered agent as well as his mailing address within the state of Nevada. Your business must also have an incorporator. The incorporator is the individual who prepares and files the Articles of Incorporation. In Nevada, the Articles of Incorporation must include the name, address and signature of each incorporator. If there is more than one incorporator, an additional 8.5 x 11 white sheet of paper listing the relevant information may be attached to the Articles of Incorporation.
Board of Directors
The Articles of Incorporation must include the names of all individuals serving on the board of directors, sometimes called the governing board. The board of directors generally makes the bylaws, which are the governing rules of the business. However, the authority of the board to adopt, amend or repeal the bylaws may be limited by the Articles of Incorporation. Directors must be natural persons (i.e. not corporations) and at least 18 years of age. Additionally, a corporation must have at least one director, but may have more.
The Articles of Incorporation must state the maximum number of shares the corporation is authorized by its board of directors to issue. The articles must also state the par value of the shares. Par value simply means the minimum amount the shares must be sold for. In other words, if the par value of a share is $10, the share cannot be sold for less than $10. In Nevada, "no par value" is an acceptable designation.
Filing the Initial List of Officers and Directors Application
The process of forming a C corporation does not end upon filing the Articles of Incorporation. In Nevada, to maintain your corporation's good standing, you must annually file a form that includes a list of officers, directors and registered agents. This form will be mailed to your registered agent during the first month after the Articles of Incorporation are filed, and every year thereafter.