How to Establish a New C Corporation

By David Carnes

The term "C corporation" is a taxation status established by the Internal Revenue Code and administered by the IRS. Once you form a corporation, you don't have to do anything to make it a C corporation. The IRS will simply treat your corporation as a C corporation, unless it qualifies as an S corporation and notifies the IRS that it elects to be taxed as such. C corporations are taxed separately from their shareholders.

Advance Preparation

Since an incorporator must sign the articles of incorporation, which is the document that once filed creates the corporation, you must select an incorporator or incorporators to submit and file the articles, as well as guarantee its accuracy. You must also select a registered agent with an in-state street address. The registered agent must be willing to receive the corporation's official correspondence. Finally, you must select a name for the corporation, which must include an indication of limited liability, such as "Incorporated," "Corporation," or an abbreviation thereof. You can use the name availability search function typically found on the state secretary of state's website, or equivalent state government website that handles business formations, to see if the name you want is already being used. For a fee, you can reserve the name for a certain period.

Registration

A fill-in-the-blanks version of the articles of incorporation should be available on the secretary of state's website. It is typically only a page or two long; many states allow you to file it online. On the articles, you must include reveal basic information such as the corporate name, the head office address, the name and address of the registered agent, the name and address of the incorporator, the number of authorized shares and the corporate purpose. You will be required to pay a filing fee. Once the secretary of state accepts the articles of incorporation, your C corporation is established.

Ready to incorporate your business? Get Started Now

Bylaws

Although you must prepare corporate bylaws, you don't have to file them with any authority. Your bylaws should state how the corporation will select directors, when and where meetings of the directors and shareholders meetings will be held, how many directors or shareholders make a quorum, what officers the corporation will establish, how shares will be transferred, which corporate decisions are reserved only for the shareholders, and other corporate governance matters. The corporation should keep the bylaws on file at corporate headquarters.

The Organizational Meeting

Soon after filing the articles of incorporation, the corporation should hold an initial meeting of the board of directors. Some states allow you to name directors in the articles of incorporation. If not, the incorporator(s) should convene the meeting, appoint directors and turn the meeting over to them. The directors should approve the bylaws and sign them. They should also authorize the corporation to undertake other important preliminary matters such as opening a corporate bank account and applying for a business license.

Ready to incorporate your business? Get Started Now
How Do I Become Incorporated in California?
 

References

Related articles

How to Get an S-Corporation Enterprise

An S corporation is a corporation that has been approved by the IRS to be taxed under Subchapter S of the Internal Revenue Code. An S corporation is typically not taxed as an entity. Instead, the IRS and many state governments tax shareholders of an S corp on their proportionate shares of the corporation's taxable income. This results in a net tax savings in many cases. To form an S corporation, you must form a corporation that complies with Subchapter S restrictions, and then elect S corporation taxation with the IRS.

How to Change a 501(c)(3) Corporation's Name

A 501(c)(3) corporation, otherwise known as a nonprofit, is an organization that is organized under state law but has a special tax status granted to it by the IRS. These groups are not meant to enrich individuals, but promote a charitable, religious, educational or public safety purpose. Individuals can make donations to these groups and deduct those amounts from their taxable income. If a 501(c)(3) corporation wishes to change its name, it must file with both the state it is organized in and the IRS.

How to Setup Directors in an S Corp in California

An S corporation, similar in many ways to a standard C corporation, elects to be taxed as a pass-through entity by the Internal Revenue Service rather than to pay corporate income tax. When you file articles of incorporation in California, you must also file Form 2553 with the IRS to confirm the S corp election. Corporate statutes, in the state where a business is formed, govern S corporation management. As such, California corporate law sets forth the rules for setting up a board of directors.

LLCs, Corporations, Patents, Attorney Help Incorporation

Related articles

How to Write an S Corp Operating Agreement

An S corporation is a qualifying corporation that has elected to be taxed under Subchapter S of the Internal Revenue ...

How to Design a C-Corporation Agreement

A C Corporation is the standard form of corporation and is the basis for all other corporate forms. While partnerships ...

The Steps in Starting an S-Corp

An S corporation is simply an ordinary corporation that has elected to be taxed under Subchapter S of the Internal ...

How to Develop a Charter & Bylaws for a New Organization

Starting a new business can be an exciting adventure. At the same time, you must address many important formalities at ...

Browse by category
Ready to Begin? GET STARTED