How To Establish A C Corp

Did the Coronavirus Pandemic position you to start your own business? Are you wondering: C Corporation vs. LLC? This article covers C corporation advantages and disadvantages and steps for correctly setting up your c-corp...

What Is A C Corporation (C Corp)?

There was an uptick in new businesses startups this past year. Many started working from a home office and offering products and services online. Others partnered with manufacturers and distributors in getting product lines to the market.

Despite the struggles resulting from the Coronavirus pandemic, the market seems to be strong, which means it is still a fantastic time to start a new venture. If you have been thinking about developing a new product or building a company, you are in the perfect position to get started.

There are basics to cover when you are starting a new company. However, in this article, we are going to focus on one thing: How to establish a C corp and why it may be the right choice for your business. Let’s get started, shall we?

Why A C Corporation?

A C corporation is essentially a company owned by shareholders and run by a board of directors. In a C corporation, the owner of the business and the business itself are seen as two separate entities; the legal and financial liabilities are separate as well.

A C corporation has its benefits. The separation mentioned above is the first one. Should anything happen to the business, you, as the business owner, are not exposed to legal and financial risks. The business is also seen as a separate taxpayer.

With a C corporation, you can raise capital by selling shares in the company. Even in its infancy, it is not uncommon for a C corp to receive investment in exchange for ownership. You only need to convince investors that the company has a bright future. Which, for some, seems like a huge hurdle. For others, not at all.

As for the owners, anyone can choose to sell their shares without completely dissolving the company. This generally means that a C corporation lives longer than an LLC. Incorporating early as a C corporation can be a great strategy.

How Do You Incorporate?

There are several steps that you need to complete to start a C corporation. In the USA, you start by choosing a business name that is available according to the regulations of your state. The next step is registering an employer identification number (EIN) or getting a tax ID.

You then form your board of directors. This is done by appointing certain people, including the shareholders if that is what you want to do, and defining the structure of the board. Many founders also define the structure of their companies at this stage.

The actual incorporation process is easier than you think, as this article from AdvancePoint Capital explains.

Getting Started With Your C Corp

Once you are incorporated, you can begin operating as a business entity. Your personal tax and financial responsibilities are completely separate from those of your C corporation. Other shareholders are positioned in the same way too.

The real challenge is getting the company off the ground. But the market provides you with the perfect environment to do so.

Incorporate as a C Corp today and start seizing market opportunities, taking advantage of tax deductions and cuts, and acquiring loyal customers that will turn your business idea into a big success.

2 Replies

By Global Interscope on 26th March, 2021

Thanks for the article. Its very useful

Reply to Global
- By Keri Jaehnig on 26th March, 2021
  
  Hi there, Glad you find this article helpful. We update the blog frequently with similar insight catering to business owners, marketing managers and mobile entrepreneurs. Please stop back! 🙂 Thank you for sharing your thoughts, ~Keri
  
  Reply to Keri