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How do I run a C-corp, what are the key formalities?

A lot depends on which state you’re incorporated in. So the steps listed below may or may not apply to you. Generally, you’ll have to complete these formalities as a C-Corp:

  1. File a certificate of incorporation
  2. Obtain a federal employer identification number (EIN) for tax purposes
  3. Hold an organizational meeting
    1. Adopt your bylaws (internal rules for running and governing your corp)
    2. Authorize initial shares (a temporary board will issue the share)
  4. Hold your first shareholder meeting
    1. Elect directors (who will then select officers to run day-to-day activities)
  5. Hold an annual shareholder meeting
  6. Pay the corp’s annual report and franchise tax. Pay your federal and state taxes.
  7. ALWAYS maintain a duty of care and duty of loyalty as a director. In short, you need to act like a reasonably prudent person would under the same circumstances by putting the corporation’s interests ahead of personal interests. When a director fails to fulfill his / her duties then a court may “pierce the corporate veil” thereby exposing that director to personal liability. This can happen if a director commingles company funds with his / her personal money.

If you need some help with your legal compliance feel free to check out LawTrades. We take the pain out of finding a great startup attorney and offer free consultations to ensure you can work well with him/her. Good luck!

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