How do I open up a C Corp?
A C-Corporation, or C-Corp, is a type of business entity that is legally separate from its owners and shares its profits with shareholders. It is subject to corporate income tax, and its shareholders are also taxed on dividends.
It's one thing to know how to open a C Corporation, but that is worthless if you don't know when you should do it. Let's break down the relevance of this question based on two high level categories. We'll walk through an explanation as well as provide a score, 1-10, that shows you how relevant this question is whether you do or don’t have a product.
The first scenario we will walk through will be if you do not have a product yet. Whether it is a website or a mobile app, you are still in the ideation or planning phase and have not yet built anything. Maybe you have started development but just aren’t finished with your first version. Whichever it is, we'll get into why this question is or isn’t relevant and why you should or shouldn't care about it if you do not have a product.
If you do not yet have a product yet, opening a C-Corp may not be necessary until you have developed a viable product or service to offer. However, establishing a C-Corp early on can provide legal protection and help you attract investors.
Live Product: 6/10
The second category is if you do have a live product. Maybe you just launched your business or maybe it's been live for years and you're continuing to improve its quality and release new features. Regardless of the scenario, if your product is live, this question carries a different weight of relevance.
If you have a live product you are selling, opening a C-Corp may be beneficial as it can provide limited liability protection, potential tax advantages, and a more professional image for your business. It may also make it easier to raise capital and attract investors.
Here are the top 5 tools and services that can help you open a C-Corp:
- LegalZoom: A popular online legal service that can assist with filing Articles of Incorporation, obtaining an EIN, and providing registered agent services.
- Rocket Lawyer: Offers customizable legal templates, including bylaws and operating agreements, as well as assistance with incorporation and registered agent services.
- Incfile: Provides affordable and comprehensive incorporation services, including EIN registration, bylaws creation, and registered agent services.
- Northwest Registered Agent: Offers incorporation services, registered agent services, and assistance with annual compliance requirements.
- Stripe Atlas: A platform designed to help entrepreneurs form a C-Corporation, open a bank account, and access resources to help grow their business.
- A C-Corporation is a legally separate business entity that distributes profits to shareholders and is subject to corporate income tax.
- Opening a C-Corp involves choosing a unique business name, appointing directors and officers, filing Articles of Incorporation, obtaining an EIN, creating bylaws, issuing stock, and opening a corporate bank account.
- Opening a C-Corp may not be necessary if you do not yet have a product to sell, but it can provide legal protection and help attract investors.
- If you have a live product, opening a C-Corp can offer limited liability protection, tax advantages, and a professional business image.
- LegalZoom, Rocket Lawyer, Incfile, Northwest Registered Agent, and Stripe Atlas are top tools and services to help you open a C-Corp.