How to Form a C Corporation in Kentucky
Introduction
Congratulations on your new business! Whether it’s a side hustle or the real deal, you’re going to need to form a corporation and put together some key documents. To help get started, we’ve outlined everything you’ll need to know about forming a C corporation in Kentucky.
Decide on a unique business name.
You must choose a unique business name. You may not use the same or similar names as another Kentucky C Corporation, or you may risk losing your corporate charter and all of the benefits that come with it. Your name can be up to 15 characters long, including spaces and punctuation marks. Avoid using numbers or abbreviations in your business name—they can be confusing for consumers and make it harder for them to find you on search engines like Google or Bing.
The best way to choose a unique name is by brainstorming with other staff members until you find something everyone likes. Once you’ve decided on a name, check it against the Secretary of State’s database of existing businesses in Kentucky before filing anything with the state government
Pick your registered agent.
Registered agents are often referred to as “corporate representatives” or “registered offices.” They’re the people who accept legal mail on behalf of your company. You need a registered agent because it’s one of the requirements for forming a corporation in Kentucky. If you don’t have one, the Secretary of State will reject your application for registration.
You may think that if your business is just starting out and isn’t doing any business yet, it doesn’t make sense to spend money on this service right now. But think about how much time it would take for someone at your company to open all those letters once they start coming in—and remember that this is something that needs done each year (more on this later). It’s better early than never!
There are several ways to find registered agents:
- Call up local companies and ask them if they provide these services; many do so at no charge or only nominal fees (as little as $10)
- Look online at sites such as Yahoo Local or Yelp Local; there are plenty of reviews from happy customers who’ve used these agents before
File your articles of incorporation.
According to the Kentucky Secretary of State, your articles of incorporation must be filed with the secretary of state. (You’ll need to be a registered agent for this.) Filing costs $25 and there are several options that allow you to file online or by mail.
You will also need to file an initial certificate, which costs $35 and can be done either electronically or by mail.
Draft your corporate bylaws.
Before you can get started on the paperwork, you need to write your corporate bylaws.
A corporation’s bylaws are like its constitution—they outline the rules of operation and govern how decisions will be made. They also include other important details, like who has the power to call meetings and make decisions, how much money is needed for starting capital (called “minimum paid-in capital”), whether or not directors can be removed from office, and when annual shareholder elections should take place. The good news is that there are plenty of resources out there to help you create your own bylaws. You can find an example set here or download a blank template here.
The next step is getting your board together for an initial meeting where they’ll review these documents and approve them as official corporate policy before filing with Kentucky Secretary of State Corporations Division (see below). Once approved, keep these documents updated regularly so they continue reflecting current regulations in your state; this means simply reviewing them annually (or whenever something changes) rather than changing them every time something happens at the company level!
Hold a shareholder meeting and elect the corporation’s directors.
Once you and your partners have decided to form a corporation, you’ll need to hold a meeting of shareholders. Shareholders are the owners of the business and are responsible for electing directors. Directors manage the day-to-day operations of a company and make important decisions about how it operates. The board of directors is usually comprised of three people (for large corporations) or five people (for smaller businesses).
After you’ve elected your board members, they will hold an organizational meeting where they decide upon rules for running the company. These rules should be written down in what’s known as bylaws so that everyone has access to them.
Appoint officers to handle management duties, such as a president and treasurer.
In addition to a board of directors, your corporation will need officers. Officers are responsible for establishing policies, managing the day-to-day operations of the business and fulfilling other specific tasks that can’t be delegated to anyone else. In Kentucky, there are two main types of corporations: those with officers and those without them. It’s up to you which type you choose!
- A president is the head officer in charge of supervising all activities related to management duties and personnel matters. He or she may also have authority over financial matters such as setting budgets or approving expenditures from company funds.
- A treasurer oversees financial matters such as accounting systems, budgeting and tax preparation tasks — essentially anything related to money!
- Other types include secretary (responsible for keeping records), vice president (second highest ranking officer)
You will need several people to help you oversee your business.
The C Corporation foundation is a great way to create a successful business. However, it’s important to know that running this type of corporation requires more than just your knowledge and expertise. You will also need the help of several other individuals.
The roles of each person are as follows:
- The Board of Directors – These are typically people who have experience in business management or finance, but they don’t need to be experts in either field. Their primary role is making sure that all operations run smoothly and efficiently, so it’s essential that they have the best interests of both shareholders and employees at heart. If possible, find someone with legal training to serve as your president or CEO (Chief Executive Officer).
- The Shareholders – Shareholders are those who own stock in your company; they’re essentially investors who give money for equity in exchange for future returns on their investment (dividends). They often get voting rights depending on how much stock they buy from you during initial shareholder meetings when deciding where company profits should go each year (e.g., dividends).
Conclusion
It’s worth noting that the legal requirements for forming a C corporation in Kentucky are more complicated than those for forming an LLC. That said, if you have a plan in place and know what you need to do, it shouldn’t be too hard to get started. If you have any questions about this process or would like help setting up your company, contact us today!
