Registering a corporation legally is easy
I just filed our new company’s entity, a California Domestic Stock Corporation, also referred to as a C Corporation. (aka, I just registered a C Corporation).
A lot of people seem to get very overwhelmed with everything you have to do to open a new business. It is actually quite easy to simply just open up an entity, ie: LLC or a Corporation you really just need to file 1 piece of paper with the state.
All you need to do is file one document; the Articles of Incorporation, this document will register your company with your state. You can find this document from your State’s Secretary of the State. You can just search it online and you will find the articles of incorporation document you need to register.
All entities have their own articles of incorporation that you need to file to register. LLC articles of incorporation, a C Corporation (domestic stock corporation), and S Corporation (domestic closed corporation), General Partnership, Non-For Profit, they all have their own articles of incorporation. So to register your business you just need to find the articles of incorporation for the type of business you are going to register, fill it out, and send it in with payment.
So to officially start you business just go to your State’s Secretary of the State website, find the articles of incorporation that you need. You will just simply fill out the name of your business, your address, and then you just need to send it in via fax, mail, or hand it in typically with a check or a visa. This one document will register your entity; in a few days you will receive confirmation that you have officially registered an entity with the state.
Once you have received confirmation that your entity has been register, you are now ready to get your companies Tax ID number, also referred to as an EIN (Employer Identification Number). All you need to do to get this is simply go to the IRS.gov website, click apply for an EIN and do a 2 minute application and instantly online they will give you a EIN number.
Your now officially in business!
What is an EIN, or a Tax ID number? (Their the same thing), I’ll try to explain it a little bit.
First the EIN stands for Employer Identification Number don’t worry if you don’t have employees, it doesn’t matter, it’s just called that, basically the EIN is your companies TAX ID number with the IRS. And at the end of the year this EIN needs to report its earnings to the IRS, this is the company’s identification number with the IRS.
Your EIN is basically a separate entity; you personally have an SSN, which is your Tax ID number. You with your SSN can go out a get a drivers license, buy a car, buy a house, and the government attaches all theses things to you, they attach it to your SSN. When you have credit score report checked, you are seeing your own personal credit score; it is your SSN’s credit score.
Think of an EIN as another person, an EIN will have its own credit score. The EIN can own stuff in its name, the EIN can have its own bank accounts.
See for instance when you make money at a job, you are recording income under your own personal SSN. That is why at the end of the year you file income for your SSN.
See when you have a business, when you take in money you record that income under the EIN, and the at the end of the year the EIN files its own taxes.
Now with your tax id number, whenever you make money, you record the money earned under your company’s EIN, its tax id number. So then at the end of the year when your company files its taxes (when your company’s tax id files its taxes) you simply just file the profit/loss/net gain for your EIN.
So remember, the EIN is just a separate entity, it will have its own credit score, just like your SSN has a credit score. The EIN can own stuff, just like you can own stuff. The EIN can make money online and then at the end of the year the EIN must pay taxes on that, and like you if you make money online and record income under your SSN you have to pay taxes on that by filing a personal tax return.
Once you have an EIN you can open up your companies’ bank accounts, its really quite simple. Your EIN will make money, and then you will have your EIN file its own tax returns at the end of the year.
- #1. Register with the secretary of state your articles of incorporation
- #2. Get your EIN from the IRS.gov
This is on a basic level, how to legally register your company, it’s really quite simple. Questions or comments, feel free to ask. Start a business today!