C-Corp Business Formation: A Complete Guideline

How to Form a C Corp
Struggling to form a C-Corporation in the US? Consumed tons of guidelines but still no lead?

Many successful C-Corp business founders lost themselves in a tricky situation once in their lives. They all get it done through simple business solutions that we provide them. What did they do at that time? The answer is they get a reliable platform through which they get answers to all business problems. However, awareness harms no one, and a complete guideline must be part of your information. 

How Does A C-Corp Work?

In C-Corporations, members pay corporate taxes on earnings before profit distributions. They share profits with the shareholders in the form of dividends but that’s solely their choice. Individual shareholders are always subjected to personal income taxes. A C-Corp works through a double taxation system and enables reinvesting the earnings after taxes in the business’s projects. A lower corporate tax rate is also an advantage that only a C-Corp business structure can offer to you. 

Why Foreign Entrepreneurs Choose C-Corp Business Structure?

Out of the many business structures, C-Corps seems suitable for businessmen operating from outside of the premises of the United States. In many ways, C-Corps provide help to international business owners in setting secure and reliable business boundaries. While sitting in the UK, Germany, Canada, Singapore, or any country out there in the world, you can fulfill your dream of starting a business in the biggest trade market of the world, the US. Undoubtedly, it’s the land of dreams for entrepreneurs where no plan can get failed if lodged wisely. 

A start-up business will always require capital for its new venture and only C-Corp can offer you that. Thus, it brings security and flexibility to your new venture as well. However, C-Corps work differently in the different states of the United States. Delaware and Wyoming are considered commercial landscapes for businesses that want to expand their business horizon. You will be able to sell your products and services in the more profitable market in the world and through the platforms like Amazon and Stripe. Once you have made this decision of starting a C-Corp in America,  the fastcorpusa will let you help where to open your business in America. 

C-Corp Business Formation: Step-by-Step Guidelines 

There are slightly different requirements of every state of the US for forming a C-Corp. All you need is proper consultancy while following these steps. 

Choose Corporation Name 

Like every other corporation, choosing a business name is also crucial for C-Corp formation. Your C-Corporation name must be different from the other names existing in your state for businesses. The name registration is important while formal filing of your business for operating into a complete different state. You can also search name availability online on the website of state secretary. 

Each state has different rules and regulations in regard to your corporation’s name. Your business name must include entities like ‘limited’, ‘Company’, ‘Incorporated, or ‘Corporation. You can also use the abbreviations for everyone of these such as ‘Ltd’, ‘Co’, and ‘Inc. Don’t use the name of any trustee with your business name such as ‘Credit Union’, ‘Trustee’, or ‘bank’ etc. 

Appoint Board of All Directors 

If you have competitive board of directors, then they will present you a ‘big picture’ of your corporation. You will always have a need of reliable board of directors that can take the company in the right direction. The number of directors depend upon the state you are choosing to work in. Sometimes, you need one or more than three members in your board. This board will oversee the entire management and operations. 

Filing Process 

This filing process involves the Articles of Incorporation that are the legal documents. These documents are issued by the state business filing agency usually the state secretary. In some states, you can do the same process online. The articles of incorporation typically includes C-Corp name, locality, business vision, names and addresses of the potential stakeholders, and name and d address of the registered agent. You must complete this documentation while adhering to the state policy. Every state has different forms, filing process, requirements and terminology. You will receive the certification of C-Corp formation onces these documents are approved. 

Draft C-Corp Bylaws 

Corporate bylaws refer to rules and regulations of an organization by outlining how it operates. These bylaws are integral to be recognized legally as corporation. You can submit these bylaws before or after the formation of your corporate documents. Your company will get a roadmap through these corporate bylaws. You must consult with a lawyer for drafting any kind of legal document. 

EIN (Employer Identification Number)

All C-Corporations must file an SS-4 form for entering into the US horizon. This will give you an Employer Identification Number (EIN). This number will help IRS to identify your business for tax reporting. As a C-Corp, you must submit state the taxes such as unemployment, disability, income or payroll taxes. However, requirements may vary across jurisdictions. There could be some other requirements that may depend on the business type. You will need a bank account, while setting up payroll withholding and state tax accounts. You will the get an EIN number for your C-Corp on IRS website. 

Issue Stock 

One of the first formal corporate actions is the issuance of stock to the shareholders after forming a C-Corp. Keep this record of the stock and the price paid for it. In a C-Corp, shareholders own the setup and this share of stock represents the ownership. You must list the maximum number of these shareholders for sharing the stock. Some of the small corporations are exempted from the United State’s SEC (State Security and Exchange Commission) regarding stock issuance. But, still it’s a better idea to get a proper advice from your lawyers nd to make sure nothing left behind in compliance to rules and regulations. 

Draft C-Corp Agreement for Shareholders 

It’s an optional procedure but may contribute to your overall C-Corp business formation. A shareholder agreement is a contract between the owners of a small company. It can contribute to the company’s success in the long haul. It briefly tells how a company will operate in case if any shareholder, retire, dies, or becoming disabled. It will help company to avoid any hassle or dispute in the future. An experienced consultant or lawyer can help your C-Corp better to prepare this agreement. 

Get C-Corp Licenses, Permits and DBAs 

While entering into the premises of United State with the mind of exploring business horizon, do not forget to complete your necessary documentation such as trade name, and important permits and licenses. However, these requirements vary according to your business locality. Small business may not need any additional licenses as the businesses like restaurants, firearm sales and aviation. 

At fastcorpusa, you will find the chart of industries subject to federal licensing. You must be aware what kind of business you are dealing with and what licenses you must require. Contact at info@fastcorpusa.com for information about additional licenses you need for any locality within the geographical boundaries of US. 

Choose the best US State for your C-Corp 

We are aware what kind of question might be swirling in your mind. You must be thinking about what US state should I choose. It is always a thoughtful matter for the non-residents to choose the ideal location for their C-Corp registration. Every state has different legislations and this will affect your company’s taxes profits and business conduction. A non-citizen is in a dire need of consultancy here for considering taxes, executive decisions and anonymity. 

Some of the states such as Wyoming, Delaware and Florida are considered exceptional for domestic and foreign-owned corporate world. Due to the number of advantages these states offer, you will opt for these states instantly. Still, you need to know much more before making a final decision. 

Keep Reading!

A DBA (Doing Business As) is required to register a C-Corp business in the United States. You need to register DBA with your city, state and county. You need to stay updated and informed about all the changing scenarios around you in the world of C-Corp. You must comply all regulations while keeping up a check and balance of all records, financial statements and meeting minutes. Consult with a sound lawyers for filling all the necessary information regarding the state requirements. So that, you can be remained compliant without any objection. 

Final Thoughts 

America is always a dream land for entrepreneurs who want to do business on a large scale. There are always the best investment opportunities, and biggest number of potential investors along with a well-structured tax system. It’s always important to make a right balance between corporation benefit and legal protection that meet your specific needs as well. 

Do not go off-guard while forming your C-Corp and play safely with the support of right consultancy! Make sure to check out fastcorpusa C-Corp formation services to do it all in one click and for the best price.

Author

  • Yusra Abid

    Yusra Abid writes SEO articles for businesses that want to see their Google search rankings grow. She has been working with writing challenged clients for over four years. She provides copywriting, ghost writing, coaching and blogpost services. Her educational background in Literature has given her a broad base from which to approach many topics. She enjoys preparing content for individuals who are facing challenges in professional dialects.

About Fastcorp USA

Founded in 2012, FastCorpUSA is the largest company service providers for international entrepreneurs planning to set up bases in the United States. We help overseas entrepreneurs navigate the webs of governmental paperwork and ensure all members companies are compliant to the US laws.

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