How to form a C-corporation for Wholesale


So, you’ve finally decided to take the plunge and incorporate your business. Congratulations! Incorporating your business can be a great way to protect yourself from liability and increase your profits, but it also has its own set of tax implications that you’ll want to consider.

What is a C-corporation?

It is a corporation that pays taxes on its income. It’s also known as a regular corporation, and it’s the most common type of business entity in the United States.

An S corporation is similar to a C-corporation; it also offers limited liability for shareholders but doesn’t pay corporate income tax. It does, however, pay its owners’ individual income taxes on their share of profits—just like partners in any other sort of partnership do. The primary difference between an S corporation and a C-corporation is that with an S corporation you can elect not to treat yourself as an employee (that is, take wages) but instead treat yourself as an independent contractor; this means you’ll need someone else to sign off on your paperwork before you start work.

Incorporating your business from the get-go

If you’re just starting out and don’t have much in the way of assets yet, it might be easier for you to start as a sole proprietorship or general partnership and convert later; this also lets you get going right away without having to deal with extra paperwork. But if your business is successful enough to warrant incorporation in its early stages, then why not do it right now? It’s never too late to incorporate—you can always retroactively file the necessary paperwork if needed.

If you decide against incorporating at first but find yourself wanting more protection later on. You could switch from an LLC (limited liability Company) into an S-corporation so that your personal assets are protected by double taxation of corporate profits; however, this will require filing additional paperwork each year. In addition, depending on how many shareholders there are within an LLC or corporation, additional shareholder meetings may be required each year as well.

Steps for forming a C-corporation

The first step to forming a C-corporation is to find a business lawyer to help you with the process. You will need to file articles of incorporation with your state’s secretary of state, which requires paying a filing fee and filing articles that include:

  • The name of your corporation
  • Your address and other contact information
  • The names, addresses, and signatures of each incorporator (the people who create the corporation)
  • A statement that all shareholders must be U.S citizens or residents (unless there’s an exemption)

Choose a Corporate name

This is the name that will go on all of your legal documents, so it’s important to make sure it meets certain criteria.

  • Make sure your business’s name won’t be confused with any other businesses or products out there already. If someone asks for “Kotex” tampons and you deliver pad-style napkins, they may be disappointed (and upset).
  • Make sure that your company name isn’t too similar to another company in the same industry; people will think you’re copying them if they see two companies with similar names working in the same sector, even if they’ve been around for decades.

Create Articles of Incorporation

The article of incorporation is the document used to create and establish a corporation. It includes basic information about who has formed it and where they’re located, as well as details on how it’s going to operate. It also specifies what kind of company they’re forming: whether it’s going to be public or private and whether it will have shareholders (owners) or not.

Obtain an EIN

An EIN is a nine-digit number that the IRS issues to business entities in order to distinguish them from individuals. The IRS maintains a database of all records pertaining to EINs, which it uses for tax purposes and other activities related to business administration.

Register your corporation with the Secretary of State

You can do this online, or in person. Either way, it’s a pretty simple process and you should have no problem navigating it on your own.

  • The fee varies by state but ranges from $30-$150 depending on where you live
  • You will need basic information about yourself (your name, address, and social security number) as well as some details about your business (what kind of company it is and who owns it). You will also be asked to provide an Employer Identification Number (EIN) if applicable

Register your corporation to pay state and local taxes

The first step in this process is to register your corporation with the state. You’ll also need to register with each of your local governments, including any cities and counties within your area of operation.

Next, you’ll want to register with the IRS by filing Form 1120 or Form the 1120S depending on whether you had a net income of $500,000 or more ($250K if a Subchapter S election). The next step is to register with the state tax commission and file an Annual Tax Return (Form ST-1). Finally, since every business must charge sales tax on any product they sell in a state where they do not have a physical presence such as an office building or warehouse facility–like wholesale distributors–you’ll need to register with that state’s sales tax commission.


You may want to consider forming a C-corporation for your wholesale business if you want to protect yourself from liability and keep your personal finances separate from those of the business. You will also be required to pay taxes on your income, but this is generally less than what would be paid if you incorporated as an S-corporation or LLC.

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