How to form a C-corporation for Real estate


There are many types of business entities, including sole proprietorships and corporations. The type you choose depends on your goals and financial situation. If you’re considering incorporating your business as a C-corporation for real estate, this guide will help you understand how to form one.

Decide where to incorporate

Choosing a state in which to form your C-corporation can be challenging, as there are many factors to consider when making this decision. You’ll want to keep the following in mind:

  • Tax laws: Are the corporate tax rates favorable? What about sales and property taxes?
  • Corporation law: How accessible are courts in this state? Are there any limits on how much money shareholders can invest or withdraw from their companies’ accounts?
  • Labor laws: Does this state have labor unions? Do they have a history of unionization?

Choose a name

The only thing to keep in mind is that the name must not already be in use by another corporation or limited liability company (LLC) with the state filing office. It should also not be too similar to any entity that exists in your industry. This can confuse customers and potential clients, who may think they are dealing with another business when they’re actually doing business with yours. When choosing a name, make sure it’s short and memorable so as not to confuse customers or employees who may have difficulty remembering a lengthy title later on down the line when things get busy!

File articles of incorporation with the state where you want to incorporate

A corporation is an entity created by state law with specific rights and powers. A corporation can be a for-profit or non-profit business, but it has shareholders that are not personally liable for its debts. Corporations must abide by the laws of their state and federal governments, and may be taxed as such.

You should consult with your lawyer before creating a C-corporation for real estate investing—but if you aren’t able to retain legal counsel, here’s what you’ll need: Articles of incorporation filed with the state where you want to incorporate (a sample can be downloaded from the Secretary of State website);  Your board of directors’ names listed in your articles;  Stock certificates ready for issuance; and A registered agent who will receive all official correspondence from the state on behalf of your company.

Draft a corporate Operating Agreement

A corporate operating agreement is a contract between the shareholders and the corporation, which sets out all of the rights and responsibilities of each party. It can be a written document or an oral agreement, but it should be in place before you start doing business. Operating agreements are flexible; they can be modified at any time, as long as all shareholders agree.

The operating agreement should address important issues such as:

  • How much money each shareholder will contribute to startup costs?
  • Whether voting rights will depend on how much each shareholder contributes (which would require meetings where only those who have paid their dues are allowed to vote) or if one share equals one vote (which would make sense for an equal partnership). You could also consider having different classes of shares with different voting powers.
  • What percentage of ownership each person has in case someone wants to sell his/her share during liquidation proceedings, whether there are penalties associated with selling shares before retirement age (if so then only certain people may sell their stake early), how often shareholders must meet annually or biennially etcetera – these questions will vary widely depending upon what type venture one decides upon starting up!

Hold an initial shareholders meeting

If the shareholders have already agreed to be bound by the corporate bylaws in their state of incorporation, then no actions need to be taken. If they haven’t, then they should hold an initial meeting and vote on them before proceeding. The initial meeting must include all shareholders present or represented by power of attorney. Shareholders can also vote on other issues, such as the board of directors and its members; issues relating to the corporation’s stock; and any changes in capital structure.

If you’re not sure if your business needs a specific type of corporation, speak with a lawyer or financial advisor who specializes in business law.

Get a federal employer identification number (EIN) from the IRS

To get an EIN, you must apply by phone or online. You can call the IRS and ask for an application to be mailed to you. Alternatively, visit the IRS website and fill out their online application form. Once your application is accepted, the IRS will mail a tax identification number in 10 business days or less.

You can use your EIN when opening a bank account as well as when submitting quarterly tax reports and paying taxes owed on behalf of your corporation.

Open a corporate bank account and accept tax-exempt status, if applicable

A corporation is an independent legal entity that is separate from its owners. As such, it has its own business name and identifying number. Additionally, corporations are formed with the intent of providing limited liability protection; while they do not provide full legal protection against lawsuits or criminal charges—a company cannot be sued in its own name—it does provide some protection against personal liability for debts incurred by the corporation. This aspect makes them suitable for many businesses with significant assets and liabilities. Corporations also have several other advantages over other types of business entities including: limited ability to transfer shares; greater shareholder control; broader access to external capital markets.


In summary, we hope that this article has helped you learn how to form a C-corporation for real estate. If you have any questions about forming your own company, or if there is anything else we can help with, please reach out and let us know!

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