C Corporation FAQs

What is a C corporation?

The C Corporation definition is essentially a standard corporation, and is the most common corporate structure. To create a C corporation, the proper formation documents, typically called the Articles of Incorporation or Certificate of Incorporation, must be filed with the appropriate state agency and the necessary state filings fees paid.

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What paperwork is required to incorporate?

Articles of Incorporation or a Certificate of Incorporation must be prepared and filed with the proper state authorities. You must also pay filing fees and any applicable initial franchise taxes or other fees. The type and amount of information required in the incorporation documents varies by state. If you incorporate through BizFilings, simply complete our online order form or place an order by phone, and we prepare and file your Articles of Incorporation.

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Who can form a C corporation?

There are no restrictions as to who can form a C corp. There is no age, residency or other legal requirement. Some states do require that the directors of a corporation be a certain age however, typically 18 or older. The Corporation Formation Requirements page of our state guides outlines director requirements for each state.

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Do I need an attorney to incorporate?

No. You can prepare and file the Articles of Incorporation yourself, but you should understand the requirements of your intended state of incorporation. You can use BizFilings' service to incorporate your business and save money on attorney fees. If you are unsure if incorporation will benefit your business, or what business type you should form, you should consult an attorney or accountant.

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What should I name my corporation?

Choose the name of your corporation carefully. It is very important that you project the image you want for your new business. Legally, the name you select must not be “deceptively similar” to any existing name in that state and must be “distinguishable on the record” of your state. It is possible that the name you select will not be available—that’s why BizFilings asks for a second choice on our incorporation order form. Also, the name you choose must show your business is incorporated. Most states require that the name be followed by an ending such as "Corporation," "Incorporated," or an abbreviation such as "Inc." or "Corp." For details on state requirements, view the Corporation Formation Requirements page of our state guides.

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What is double taxation regarding C Corporation taxes?

Double taxation occurs when a C corporation's profits are taxed at both the business and individual levels. Business profits are reported and taxed at the corporate level first. Then, if the C corporation distributes any remaining profits to shareholders in the form of dividends, shareholders must report the dividend as personal income and pay taxes on it at the individual level. To avoid double taxation, many business owners choose to make a special election with the IRS to become an S corporation.

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What are authorized shares of stock?

C corporations must indicate the number of shares of stock they want to authorize (and a par value associated with each share) in the Articles of Incorporation. The number of authorized shares is the total number of shares available for a C corporation to issue to shareholders; however the C corporation does not need to issue the total number of authorized shares. Some opt to hold unissued shares in order to add additional owners at a later date or increase the ownership percentage for a current shareholder. An issued share of stock shows ownership in the C corporation and each shareholder obtains a certificate representing the ownership value of the C corporation. Companies can alter the number of authorized shares or the par value of shares at anytime by filing a share amendment with the state.

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What is a share’s par value?

The par value of a share of stock is its minimum stated value. Par value typically does not correlate to the actual value of a share. Common par values are $0.01, $1.00 or no par. The actual value of a share is its fair market value, or what someone is willing to pay for a share of stock. For public companies, actual value is determined by the price investors are willing to pay for each share on the national exchange. For private companies, it is typically determined by the overall value of the corporation or the book value.

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What is a C corporation’s organizational structure?

The organizational structure of a C corporation includes three groups: shareholders, directors and officers. A C corporation is owned by shareholders; however, they do not typically directly manage the company. Instead, they influence corporate decisions through electing and removing directors, approving or disapproving amendments to the Articles of Incorporation and voting on major corporate issues.

The directors, who comprise the “board of directors,” are responsible for managing the affairs of the C corporation. They usually make only major business decisions, and appoint and supervise officers, who make the day-to-day business decisions.

Officers are responsible for the everyday company management.

Note: A shareholder may serve on the board of directors and as an officer. In fact, most states allow C corporations to have only one shareholder, who also serves as the sole director and officer. This is very common for C corporations who only have one or a few shareholders.

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Where should I incorporate my business?

Once you’ve decided to form a C corp, the next step is to decide where to incorporate. It is not a requirement to form your company in the state where it is physically located (the home state), but there are factors to consider when evaluating which state is best. Small businesses owners typically consider two factors deciding where to form a C corporation: the cost of forming in the home state versus the cost of forming in another state and the ongoing corporate requirements and C corporation taxes of the states under consideration.

1. Home state incorporation versus foreign qualification

If the C corporation is a closely held corporation, meaning it has one or few shareholders, and does business primarily within a single state; incorporation within the home state is often preferable. The cost of home state incorporation will usually be less than incorporating in another state and registering to do business your corporation in your home state (a process called foreign qualification).

A corporation that qualifies to do business in another state is subject to C corporation taxes and annual report fees from both the state of incorporation and the state of qualification. Another disadvantage of incorporating outside of your home state is the possibility of having to defend a lawsuit in another state.

2. Corporation requirements and taxation

When deciding where to incorporate, it’s also good to research that state’s ongoing corporate requirements (such as annual report and franchise tax requirements) as well as general state taxation requirements. View the Ongoing Corporation Requirements page of our state guides to learn more about these requirements in each state.

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What are common C Corporation advantages?

Typical C Corporation advantages include limited liability protection, an unlimited number of owners (shareholders), easy transfer of ownership and an unlimited life should any shareholders die, the corporation will not cease to exist. In addition, other C Corporation advantages are the ability to raise capital, tax deductible expenses and a lower audit risk. In addition, forming a business as a C Corporation will provide great credibility compared to a sole proprietorship or general partnership.

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How many directors do I need to form a C corp?

Only one director is required in most states, but you are allowed to have more. Some states use the number of shareholders in the C corporation to determine the minimum number of directors. For example, if the number of shareholders is three, then the C corporation must have three directors. If the company has less than three shareholders, then the number of directors may equal the number of shareholders. For details on state requirements, view the Corporation Formation Requirements page of our state guides.

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Can you explain the registered agent requirement?

When you incorporate a business or register to transact business in another state (a process called foreign qualification), you must typically name a registered agent for your company. The registered agent is responsible for receiving important legal and tax documents on behalf of your business. The registered agent must also have a physical address in your state of incorporation and be available during normal business hours.

BizFilings provides Registered Agent Service in all states. As your registered agent, we go beyond satisfying the state's legal requirement. We provide a number of benefits at no additional charge to you, including access to BizComply─our online compliance management tool, our monthly Registered Agent Watch email, electronic Service of Process (notice of litigation) delivery, online access to your account and more.

With BizFilings as your registered agent, we help you:

  • Avoid the risk of non-compliance. Business compliance requirements imposed by your state of incorporation are not likely to be your area of expertise, or interest. As your compliance partner, BizFilings will help you stay in compliance with state requirements for C corporations, avoid unnecessary state penalty fees and maintain your company's good standing in your state of incorporation.
  • Protect your privacy. When a company is served with a Service of Process, it is often delivered by local law enforcement. Most business owners do not want police officers showing up in front of customers, employees or neighbors (in the case of a home-based business), to serve them notice that their company is being sued. Having BizFilings as your registered agent service provider ensures you receive any Service of Process promptly and privately.
  • Fulfill the requirement to be available during normal business hours. The registered agent for a business must be available during normal business hours to accept important documents as they are delivered. Many business owners today set their own hours or are often away from their office or home-office. With BizFilings as your registered agent, we ensure you never miss these important communications.
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How do ensure my registered agent requirement is met?

BizFilings includes Registered Agent Service with our incorporation service packages. With BizFilings as your registered agent, we not only meet the state's legal requirement, but we also provide ongoing compliance assistance to help keep your C corporation in good standing in your state of incorporation. With your incorporation order you receive 6 months of our Registered Agent Service for free. We also help you avoid interruption of this valuable service with our convenient auto-renewal program. At the time of renewal, you can choose to renew your company’s Registered Agent Service yearly for $167, two years for $249 (save $129) or three years for $348 (save $219).

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What is a C Corporation publication requirement?

A few states require notice to be published in a newspaper that a C corporation has been formed in that state. States with this requirement for C corporations include: Arizona, Georgia, Nebraska and Pennsylvania. BizFilings can help you satisfy the publication requirement in these states.

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How do I get started with the incorporation process?

After choosing your business type, Articles of Incorporation must be filed with the state government and initial fees must be paid. After your Articles of Incorporation are filed, your C corporation must hold an organizational meeting (initial meeting of directors) where you adopt bylaws and undertake other initial corporate actions (such as appointing officers and approving a resolution to open a business bank account). You should distribute stock certificates to shareholders and record these transactions in the company’s stock transfer ledger. The actions of the organizational meeting should be documented and kept along with the Articles of Incorporation and bylaws in a corporate record book. Our Compliance Kit & Seal, which is included in our Standard and Complete Incorporation Services, has all the items necessary for holding and documenting the organizational meeting.

To learn more about post-formation requirements for C corporations, view our Important Steps to Take After Business Incorporation or our Business Compliance Requirements articles.

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What is Rush Filing Service?

BizFilings' Rush Filing Service for C corporations allows customers in certain states to decrease their formation filing timeframe to 24 to 48 hours.

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Is Rush Filing for C corporations available for every state?

No. BizFilings’ Rush Filing Service is available for C corporations in the states listed in the chart below. The turnaround time listed adjacent to each state is the time it will take us to receive verification that your incorporation documents have been filed with the state, following the name approval or consent. The turnaround time excludes weekends and holidays. Total time for receiving your state-approved incorporation documents from the state and returning them to you may take around a week after verification.

State Turnaround Time State Turnaround Time
Alaska 24 hours Massachusetts 24 hours
Arkansas 24 hours Michigan 48 hours
California 48 hours Montana 24 hours
Colorado 24 hours Nevada 48 hours
Connecticut 48 hours New Mexico 48 hours
Delaware 24 hours New York 24 hours
Florida 24 hours North Carolina 48 hours
Hawaii 48 hours Ohio 48 hours
Kansas 24 hours Texas 24 hours
Maryland 48 hours Virginia 48 hours
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With Rush Filing Service, how soon will I receive my incorporation documents?

The 24- or 48-hour filing time is for the approval of the incorporation only. It typically takes longer for states to produce the C corporation's filed incorporation documents. Once BizFilings receives your documents from the state, we will ship them to you via FedEx Overnight delivery. This means you should have your documents in hand anywhere from just a few days to one week after filing. We will also scan and make them available in our Online Status Center for you to access before receiving the originals.

Note: Some states require your signature on the incorporation documents when someone other than BizFilings is acting as registered agent. In these cases, the filing timeframe of 24 to 48 hours begins after we have received the signed documents and received any applicable approvals or consent needed prior to sending the incorporation documents to the state.

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Why should I include Rush Filing Service with my order?

Including BizFilings' Rush Filing Service with your incorporation service order secures your company name and incorporation date in as little as 24 hours. This service is particularly valuable when you need proof of incorporation to secure a contract or open a bank account for your C corporation.

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