Corporations are business entities that offer much bigger growth options than the LLC. However, they are more regulated and there are more requirements needed when setting up a corporation, such as writing bi-laws and hosting annual share-holder meetings.
There are two main type of corporations:
A typical Corporation, or C-Corporation, offers unlimited growth potential through the sale of stocks, and there is no limit to the number of shareholders a c-corp can have as well as where they can be located. It can also be owned by other entities and offer several classes of stock. The biggest disadvantage of a C-Corporation for most smaller business owners is that the entity is taxed separately from its owners, which can lead to double taxation. The S-corporation offers more flexibility in this regard.
An S-Corporation is a corporation that makes an election to be taxed under Sub-chapter S of Chapter 1 of the Internal Revenue Code. This allows the corporation to be taxed as an LLC where the entity will pass-through its profits to its members and avoid corporate or double taxation. In order to qualify to file an S-corp, the entity can only have up to 100 shareholders, and they must all be individuals (not other entities) and US citizens, and you can only issue one class of stock. Most small businesses will not have issues meeting these requirements.
Every business that files for corporation is first classified as a c corp. Only once that is complete do you have the option to file as an S-corp – by filing the IRS form 2553 – if you meet all the above requirements.
How to form a Corporation
- Choose a legal name and Draft and file your Articles of Incorporation with your Secretary of State.
- Issue stock certificates to the initial shareholders.
- Apply for a business license and other certificates specific to your industry.
- File the SS-4 form at the Internal Revenue Service to obtain an EIN or Employer Identification Number.
- To file as an S-corp with the IRS, you need to file the IRS form 2553 within 75 days of your corporation formation, anniversary of formation, or within 75 days of a new year.
- Some States require that you file your S-corp status with the local government as well.
Riverside Filings can assist in forming your Corporation in any state and get the articles back to you as quickly as possible.
After you complete the order form, your Account Manager will prepare and file your documents with the Secretary of States in each state.
Once certified, you will receive copies of the filing document, or Certificate of Formation, via email and mail — usually on the same day, depending on the state and level of service.
Riverside can also assist with the following items, should you need them:
- EIN / Tax ID
- Corporate Kit and Seal
- Publications – where required
Not sure what you need? Our expert Account Managers are standing by, prepared to guide you through the process. Contact Riverside Filings
Order your Corporation now!