Forming a West Virginia Corporation
Creating a West Virginia corporation for your small business is a great way to help protect your assets, while maintaining a growth structure almost without limitations. The LLC structure has many benefits for your LLC. There is no reason for your growing company to run the risk of running as a sole proprietorship. Forming a LLC will be the best thing for your company.
Tips on naming your West Virginia Corporation
A Corporation’s name must include Corp, Inc, Incorporated, or Corporation to be valid in the state of West Virginia. A Corporation cannot have the same name as an existing Corporation, Limited Liability Company or a Limited Partnership. The name of the new corporation must be distinguishable upon the records of the Secretary of State. To determine distinction, the Secretary of State will ignore the use of punctuation, prepositions and articles used in the company name. The Secretary of State will also ignore the use of capitalization, spaces, and plural forms of words or special characters. Also certain words will be regulated and prior approval may be needed in order to use the word in a corporate name.
Corporate shares
A corporation is owned by its shareholders. There can be as little as one shareholder or millions. Each holder of a share of stock of the company is part owner.
The requirement of every corporation is to have a certain amount of shares outstanding. The number of shares outstanding can vary as well. The absolute minimum is one share but major companies can potentially have billions of shares outstanding.
S Corp
By default, every corporation that is formed is a C corp. This designation means that the standard tax structure is implemented with a corporation where the corporation pays a tax and then any profits to shareholders is taxed again. In essence, this is the double taxation.
In a S corp, the tax structure changes to mimic the tax structure of the LLC. The corporation doesn't pay a tax and the profits and taxes are paid by the shareholders. The keep the S corp status however, the company can't grow larger than 75 shareholders. If this happens, the corporation must elect a C corp status.
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