What Do You Have to File to Become a C Corporation?

By Brette Sember, J.D.

What Do You Have to File to Become a C Corporation?

By Brette Sember, J.D.

A corporation is a legal entity that is created to operate a business. One of the benefits of a corporation is that it is legally separate from its owners. The corporation itself, not the shareholders (owners), is responsible for its debts and obligations, which provides protection to the shareholders.

Businesspeople gathering around laptop on table and smiling at each other

There are two types of corporations: S corporations and C corporations. C corporations are the default type, so if you do not apply to become an S corporation, you will automatically be a C corporation. A C corporation is taxed on its profits and then the shareholders are taxed on the dividends they receive. An S corporation, on the other hand, has pass-through taxation, which means it is treated like a sole proprietorship or partnership and the owners pay taxes on profits.

To form your C corporation, you will need to file state and federal documents. Here are the steps to follow.

1. Select a business name.

Most states require that the name signify that the business is a corporation by including "Inc." or "Incorporated" in the name. Make sure the name you'd like isn't already in use by checking the database maintained by the state agency that regulates businesses, usually the Secretary of State. It is also a good idea to make sure the name has not been trademarked through the U.S. Patent and Trademark Office, so be sure to run a search there as well. In some states, you can reserve the name by paying a fee, which holds it for you until you are able to file all of your paperwork.

2. File articles of incorporation.

Complete the paperwork for your company's articles of incorporation. These documents are available from the Secretary of State. Each state has a different form but, in general, these forms ask for basic information about your business, such as the name and business address of the corporation, the name and address of the people forming the corporation, and the name and address of the registered agent who can accept service on your corporation's behalf. You will need to indicate the purpose of your corporation. The papers must indicate how much and what type of stock your corporation is issuing. The founders who are doing the incorporating must sign the papers. A filing fee must be paid when the papers are filed.

3. Obtain an employer identification number (EIN).

Apply for an employer identification number (EIN) through the Internal Revenue Service (IRS). Similar to a Social Security number, the EIN is the number your business will use to identify itself with the IRS and your state when you pay taxes.

4. Apply for a business license.

If your state, county, or city requires you to have a business license, you must apply for it through the appropriate agency before you can begin to operate your corporation.

5. Register with your state tax entity.

Some states require businesses to register with their tax agency and set up an account so that payroll taxes, sales taxes, and other taxes can be paid. Contact your state tax department to determine what you are required to do.

Once you have completed these steps, your corporation is legally permitted to operate. However, don't forget to take other startup steps such as creating your bylaws and electing your board of directors. Properly completing all of these steps will ensure your corporation will operate smoothly.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.