C Corps face double taxation since profits are taxed at the corporate level, and dividends are taxed again when distributed to shareholders. However, C Corps can take advantage of various deductions and credits.
Incorporating as a C Corporation requires careful consideration and adherence to certain steps. Startup Tandem can guide you through the process, ensuring you meet all legal requirements:
Choose a business name and ensure its availability through a name search.
Select a Board of Directors to oversee company activities and represent shareholders.
File Articles of Incorporation with the state to formally register the business.
Obtain an Employee Identification Number (EIN) from the IRS for tax purposes.
Draft bylaws to establish operating rules for the business.
Conduct the first Board of Directors meeting, addressing essential startup matters.
Open a corporate bank account for financial transactions.
Obtain required business licenses and permits to operate legally.
Submit an initial report if mandated by your state.
Issue stock to each shareholder, complying with all securities laws.
Benefits of Forming a C Corporation with Startup Tandem
When it comes to launching your startup, choosing the right business structure is paramount. Among the various options available, a C Corporation, also known as a general for-profit corporation, stands out for several compelling reasons.
Limited Liability Protection
Alternatively, a corporation can elect to be treated as an S Corporation for tax purposes. As an S Corp, profits and losses flow directly to shareholders’ personal income tax returns, avoiding double taxation. This election opens up tax advantages while maintaining the benefits of a C Corporation.
While incorporating and compliance may seem daunting, Startup Tandem can handle the legal paperwork, saving you time and money.
Don’t let legal complexities hinder your entrepreneurial dreams.