How to form a C-corporation for Beers and Beverages

Introduction

If you’re starting a business that sells beers or beverages, it’s important to choose the right corporate structure. A corporation allows its owner to separate personal assets from business assets, which protects personal wealth should anything go wrong with the company. C-corporations are useful for this type of business because they allow owners to make profits by selling stock. In this guide, we will explain how to form a corporation so that you can start selling beer and spirits in your state!

Step 1: Choose a unique name for your business

This will be the official name of your business and should be reserved as such by filing with the Secretary of State’s Office or a similar agency in your state. Make sure that no other businesses are using this same name, as it could lead to confusion and legal action against you down the line if someone else has taken that exact title.

A few things to keep in mind while choosing a name:

• It should be easy for people who aren’t familiar with what type of company yours is—either because they’re new clients or just didn’t get all their information right away—to remember how you refer back to it later on (i.e., “The Beer Company,” not “The Beer Co.”).
• It shouldn’t contain any offensive words or phrases that might upset customers at first glance (i.e., “Beer for Life”).
• The length should fall somewhere between two and five words; anything longer than five will start getting cumbersome for both parties involved.

Step 2: Choose a corporate structure

The most common choices for beer and beverage businesses include an S corporation, a C corporation, a limited liability company (LLC), and partnerships. Each type of entity has its own rules that you’ll need to follow in order to be considered compliant with the law.

• An S corporation is subject to double taxation—it pays taxes on its income as it earns it and again when it distributes dividends to shareholders. If you plan on distributing all profits as bonuses or salaries though, this isn’t going to be a big deal—you can still keep your tax bill low while keeping cash in the bank before paying out dividends later on.
• A C corporation is usually taxed at the highest brackets due to being treated like a business rather than an individual owner who also happens to have some other sources of income (e.g., having investments). If possible though, try not using this structure unless there are specific reasons why management would benefit from being taxed differently than shareholders or partners—in most cases it’s better for everyone involved if everyone pays their fair share of taxes upfront rather than waiting until after each year’s earnings have been calculated!

Step 3: Identify the people who will direct and manage the business

As an S corporation, you or your group of investors must serve on the board of directors. The board manages the day-to-day functions of the business, and it appoints officers who are responsible for directing specific aspects of operations. A C corporation has two types of officers: directors and executives. Directors manage the company’s overall direction; they’re not involved in daily operations like those who hold executive positions might be.

Directors need to have at least one member who is a natural person (i.e., human) citizen, or resident alien from each state where your business does business, but this can change depending on where you live and what kind of capitalization structure you choose for your company.

Step 4: Register with your state

This is a legal requirement, and it’s also an important step to protect your business from lawsuits or other legal issues related to corporate liability.

Registering with your state can be done online in most cases. You’ll need the following information:

• The name of your corporation
• The name and address of each shareholder (the people who own shares in your company)
• A statement confirming that there are no members or shareholders who are non-residents of this state

Step 5: Create bylaws and corporate resolutions

Bylaws are not filed with any government agency, but they are important for your business. They establish the corporation’s internal rules and procedures that determine how it operates on a day-to-day basis.

Bylaws can include such things as:

• The number of shareholders required to approve major corporate decisions
• How often meetings will be held by shareholders and directors (for example, quarterly or annually)
• Whether voting rights accrue only when shares are registered in a shareholder’s name

Step 6: Hold a board meeting to adopt resolutions and issue stock

Your board of directors will be responsible for setting the direction of your company and making important decisions on behalf of its shareholders.

The first order of business at this meeting should be to adopt resolutions like:

• Establishing whether you’ll issue stock or not
• Specifying how much money each share is worth
• Choosing a person or people who will act as transfer agents and bookkeepers

Step 7: Apply for an employer identification number (EIN)

An EIN is a tax identification number that identifies your business with the IRS. You will need to apply for an EIN if:

• Your business has employees
• You are required to withhold taxes from employee paychecks
• You plan to file corporate tax returns or foreign bank account reports

Conclusion

These steps will help you create a C-corporation that is set up to make money. If you have any questions, please contact us. We’re happy to help!