Corporation Formation Documents
Depending on the specific type of corporation (e.g., C corp, S corp, etc.), you will generally need to rely on the following formation documents when forming your corporation:
- Articles of Incorporation
- Corporate bylaws
- Form 2553 (for S corps)
Let’s have a look at these in more detail below.
If you haven't formed your corporation yet, take a look at our How to Start a Corporation guide to get your company started.
Articles of Incorporation
A corporation’s Articles of Incorporation are the fundamental formation documents for both C corporations and S corporations.
The corporation filing information that you will need to include within your Articles of Incorporation can vary slightly depending on your state of registration.
Having said that, there are a few general points that should likely always be included:
- Your corporation’s name and address
- Your corporation’s specified purpose
- The type of shares that your corporation will be issuing
- The details of your registered agent(s)
- The details of your incorporator
After your business’s Articles of Incorporation are submitted to your state’s relevant government body (e.g., Secretary of State, Corporation Commission, etc.), you will need to wait for them to be officially “approved.”
Following state approval, your sole incorporator (which can be you, your lawyer, or your incorporation service provider) will usually appoint the initial directors of your company, who will then be in charge of:
- Drafting your corporation’s bylaws
- Electing your corporation’s officers
- Issuing shares of stock
- Handling any other prerequisite task for sufficiently running a corporation
Many people confuse a corporation’s Articles of Incorporation with its bylaws, or they may even use the two terms interchangeably. However, these are different, necessary documents.
Whereas the Articles of Incorporation are meant to establish a fundamental mechanism through which a corporation can begin to conduct business, a corporation’s corporate bylaws are focused on detailing the specificities of how a corporation will be run on a day-to-day basis.
This means that the information within a corporation’s bylaws can usually include:
- How your corporation’s officers and directors will be elected
- How your corporation’s officers will be replaced (and how often)
- How often your corporation will hold shareholder meetings
- The responsibilities and authority of each type of officer (e.g., CEO, VP, COO, CIO, etc.)
- How your corporation will resolve internal disputes
- How your corporation will dissolve (if need be)
Form 2553 (S Corps Only)
If your business is eligible to elect S corp status, you will need to file Form 2553 with the Internal Revenue Service (IRS).
S corps enjoy the majority of the benefits of C corps, with the biggest difference between them relating to how they are taxed.
Unlike C corps, which are subject to double taxation, S corps only have to pay tax once on the same stream of revenue. This is because an S corp’s profits are “passed” down directly to its shareholders, with no federal corporation tax needing to be paid.
Even though this may seem like an obvious advantageous choice, keep in mind that not just anyone can elect S corp status.
According to the IRS website, the following conditions must be satisfied in order for a company to become an S corp:
- The corporation must be domestic (i.e., formed within the US)
- The corporation must have 100 or fewer shareholders
- The corporation must have only one type of stock
- The corporation must only have allowable shareholders. These include individuals, certain types of trusts, and estates.
- The corporation must not be an illegible corporation. These include domestic international sales corporations, financial institutions, and insurance firms.
You will also need to consider how your state of operations will affect your S corp status and associated corporate filing. States generally have different requirements for when a company can be recognized as an S corp, as well as different rights associated with the tax classification.
It should be noted that some states do not automatically recognize a corporation as an S corp and must elect S corp status at the state level:
- New York
- New Jersey
Moreover, certain jurisdictions do not recognize S corp status at all and treat S corps like traditional corporations for tax purposes:
- District of Columbia
- New Hampshire
- New York City
Corporation Annual Report Filing
After you have completed your corporate filing requirements and successfully formed your corporation, you will need to ensure that you conform with your state’s annual, biennial, or even decennial filing requirements. These usually relate to your taxes and managerial responsibilities.
Not filing your corporate annual report can have very serious consequences for your company. These can range from fines and back taxes to losing your good standing with your Secretary of State or having your entire corporation dissolved.
In most states, corporations are required to file an annual report within a certain date. The information required on these can vary depending on your state of incorporation, but generally, it includes information relating to your company’s:
- Officers and directors names and addresses
- Registered agent addresses
This is because an annual report is meant to ensure that the relevant government bodies associated with your corporation have access to updated and reliable information that they can use to get in contact with you if need be.
Other annual or biannual reports include corporate filings related to:
- Excise taxes
- Proof of unemployment insurance, disability insurance, or workers’ compensation insurance
- Your corporation’s intellectual property rights
Though a corporation’s meeting minutes usually do not have to be filed, they do need to be recorded in most states. This can provide many benefits, as it allows corporations to access a “backlog” of information if they need to in order to resolve internal disputes.
In addition, recording your meeting minutes can:
- Serve as proof that your corporation’s meetings were carried out in a way that is compliant with your state’s laws (e.g., in a timely manner and with a sufficient notice period)
- Provide access to information that you may need if your corporation gets audited by a government agency in the future.
There are a few states where meeting meetings do not need to be recorded at all, these include:
- North Dakota
Having said that, the benefits of recording meeting minutes means that your corporation should keep them, even if it is not a legal requirement where you do business.
Other Important Corporation Filings
State Tax Registration
Since corporations are considered separate legal entities to their shareholders, they are required to obtain separate tax ID numbers. These can be both at a federal level (EIN) and at a state level — although requirements for these can vary significantly.
Your corporation’s state ID will relate to the ways that it can pay state income taxes. These are deductible and can vary significantly depending on your location.
This means that you will need to check with your specific state’s government website in order to identify your corporation’s local tax obligations, as well as how to apply for your tax ID.
Business Permits and Licenses
Depending on your industry, you may be required to obtain some form of a permit or license in order to operate legitimately within the US.
These may be required at a local, county, state, and/or federal level and may include:
- Operating licenses
- Zoning permits
- Health and safety licenses
- Occupational Licenses
- Sellers’ licenses
For more information on business permits and licenses for your state, check out our How to Get a Business License guides.
The simplest way to officially dissolve your corporation is to file your Articles of Dissolution.
Even though a corporation can dissolve on its own by continuously failing to file its annual reports correctly, this is generally not the best way to go about dissolving your company. This is because it will still technically exist in law as a separate business entity.
The exact forms required will vary depending on your state, but they generally require the following information:
- The name of your corporation
- The dissolution authorization date
- The date that you wish your dissolution to become effective (this could be immediate)
- The signatures of your corporation’s representatives.
Frequently Asked Questions
Do owners of corporations have limited personal liability?
Yes. Just like nonprofit organizations and LLCs, the personal assets of the shareholders of a corporation are protected under US law.
This is because a corporation is considered to be a separate business entity to its shareholders, and so it can individually generate profit, become legally liable, and continue perpetually regardless of the fate of its shareholders.
What is ‘double taxation’?
Double taxation refers to the mechanism through which shareholders of corporations pay taxes twice on the same stream of revenue (once at a corporate level, and then a second time on the shareholders’ personal tax returns).
Corporations can benefit from numerous tax deductions, which may make this fiscally worth it overall. Depending on their size and location, they may even be able to elect S corporation status. These are taxed similarly to LLCs and so are not subject to double taxation.
What happens if I lose my ‘good standing’?
Losing your good standing as a result of not properly handling your corporation’s filing procedures can have dire consequences for your corporation.
- Decreased access to financing. This is because most conventional lenders see a loss of good standing as increased risk
- Decreased expansion opportunities. This is not always the case, but other state departments can require you to show them your certificate of good standing in order to allow you to expand your corporation into another state.
- Decreased legal protection, both at a personal and at a corporate level. Corporations found to not be in good standing can have their ability to file lawsuits revoked. Their directors and officers may also be fined (and their limited liability may be revoked) if they are found to have had personal knowledge that the company was not in good standing while they were working there.
What are the benefits of a corporation?
Corporations provide shareholders with several unique benefits, albeit at an opportunity cost of higher startup costs, increased government scrutiny, double taxation, and decreased managerial flexibility.
The benefits of a corporation include:
- Increased ability to make tax deductions
- Increased access to financing
- Improved brand image
- The ability for shareholders to register themselves as employees of the corporation
Generally speaking, corporations can be a great choice for medium to large-scale businesses.
How are corporation filing requirements different for private and publicly traded corporations?
The biggest difference between the filing requirements of private and publicly traded corporations is that public companies are required to disclose financial information about the company in accordance with the strict guidelines of the Securities and Exchange Commission (SEC).
Private companies, on the other hand, have no legal obligation to disclose any information that relates to the financial health of the company — even if they voluntarily choose to do this regardless.