How to form a C-corporation for Hand tools business


If you’re starting a hand tools business and want to form a corporation, you’ll need to follow the steps below. We’ll also cover what happens during and after this process.

Choose a business name

Before you do so, though, there are a few considerations to keep in mind.

You want to make sure that the name isn’t already in use by another company or individual. Check with your state’s corporation division for availability or consult the United States Patent and Trademark Office (USPTO) to see if it’s available there too. Choose something simple and memorable so customers will be able to easily find you online and remember how they heard about your business in the first place!

Apply for an EIN

It is a unique number assigned by the IRS that identifies your business for tax purposes. Without an EIN, it’s impossible to open a bank account or file taxes—it’s also required if you want to hire employees in the future. An EIN can be obtained by either applying online or by mail; both processes take only minutes and will be issued immediately upon approval. If you have any questions about what information is required when filing your application, check out the IRS’ guide on how to apply for an employer identification number.

Draft Articles of Incorporation

They include information about the company’s name, corporate purpose, and initial stockholders. Articles of incorporation also state how many shares of stock the corporation has authorized to issue.

When writing articles of incorporation for your hand tools business, you will need to include:

  • The name of the new corporation
  • A statement describing its purpose and activities
  • How much capital stock should be issued (the total number of shares)

The following is an example of a sample article from our hand tools business template:

Review the Bylaws

These are rules that govern your business practices, including how meetings are conducted and who is allowed to vote on important issues.

In order for your corporation to remain functional, it’s important that everyone involved in management reads them carefully and understands their responsibilities under these guidelines. If you’ve formed an LLC before this step should be much easier since most states have pre-written model bylaws available online or through local legal offices. C-corporations may require more customization depending on what type of business you want yours to be—you should consult with an attorney who specializes in corporate law if needed.

Find Directors and Officers

Directors are responsible for the management of your corporation, and officers oversee day-to-day operations. Directors and officers must be natural persons, who are either United States citizens or resident aliens. They also cannot be an employee of your company. The IRS requires that directors, who serve a three-year term (can only be reelected once), should not personally profit from their position on the board.

Issue shares of stock

Each shareholder is then given a certificate for their own share in the company. When you sell the business, your shareholders receive a dividend from any profits made on sales of hand tools.

In order to issue shares of stock, you’ll need to request a certificate from your state’s secretary of state office by filling out an Application for Certificate of Incorporation with Share Subscription Privileges form (or whatever name they call it). This will cost about $100 per year but can be renewed every five years as long as you continue operating under this form.

File the Articles of Incorporation

You print the document, fill out all required fields, sign it, and mail or scan it back. The state sends you a confirmation letter with its address so that if anything goes wrong at some point in the future, they’ll know where to contact you. You also need to file this document with the IRS—its part of your annual registration process for being an S-Corp., but since we’re talking about C-Corporations here, for now, let’s skip straight ahead to filing with them instead!

Now you know how to form a C-corporation!

Now you can enjoy the benefits of incorporating, like limited liability, ease and simplicity in tax planning and record keeping, continuity through a change of ownership and management, ability to raise capital by selling stock in your company (and hopefully with more favorable terms than personal loans or credit card debt).


This is a great way to protect yourself and your assets as an entrepreneur. There are many other types of business structures, but forming this type will help ensure that your personal assets are separate from the company’s liabilities. It’s important for anyone who wants to start their own business or expand their existing one by hiring employees or selling stock so we hope this article was helpful!

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