Starting a Corporation in Oklahoma | What You Need to Know

Start a Corporation in Oklahoma

In Oklahoma, starting a corporation can benefit entrepreneurs looking to establish a separate legal entity for their business. Incorporating your business provides liability protection for its owners and offers potential tax benefits and a professional image. This comprehensive guide will walk you through Starting a Corporation in Oklahoma, from choosing a corporate name to fulfilling ongoing compliance requirements. Some people consider starting a corporation since it has advantages and benefits rather than Starting an LLC in Oklahoma.

Webinarcare Editorial Team will help you gain knowledge in starting a corporation with thorough research and market study. It would be best to cross-check all the factors in this article before forming a corporation.

What is a Corporation in Oklahoma?

A corporation in Oklahoma is a business organization recognized as a separate legal entity from its owners, also known as shareholders. When a corporation is formed, shareholders invest capital by purchasing shares of stock and, in return, become partial company owners. The corporation is managed by a board of directors elected by the shareholders to oversee the company’s operations and make important decisions. Corporations in Oklahoma are required to have at least One directors. One of the main advantages of a corporation in Oklahoma is that it provides limited liability protection to its shareholders, meaning their assets are not at risk if the corporation incurs debt or is legally sued.

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Common Types of Corporations

Before you start with a corporation, you should know what type of corporation you will form. There are several different forms of corporations you can take into consideration, depending on your corporation’s objectives and ownership structure.

C-Corporation

C-Corporation is the most known type of incorporation. They have almost all corporate distinguishing characteristics. Profits are distributed to corporate owners who are taxed at an individual level. The corporation is taxed similarly to a business unit.

S-Corporation

S-Corporation in Oklahoma is set up similarly to a C-corporation but has different tax implications and owner limits. An S-Corporation has no more than 100 stockholders and is not taxed separately. These business units must also file paperwork with the Internal Revenue Service (IRS) to obtain their status.

Nonprofit Corporation

Religious, educational, and charity institutions frequently use nonprofit businesses to run their operations without making a profit. Thus, a nonprofit corporation is exempt from paying taxes. The nonprofit organization’s gifts, contributions, or cash are reinvested in the company to fund its growth, future endeavors, or operations.

It is recommended to Start a Corporation in Oklahoma if you would like to provide limited liability protection to your shareholders rather than Oklahoma LLC. However, you may want to consult to LegalZoom’s Business Attorney before starting a business.

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How to Start a Corporation in Oklahoma

To start a corporation in Oklahoma, you must follow the below steps that, include choosing a corporate name, hiring a Registered Agent, appointing directors, filing for Certificate of Incorporation, creating corporate bylaws, holding the initial board of directors, issuing stock, obtaining required licenses and permits, registering with state tax agencies, and annual reporting and ongoing compliance. All these steps are basic ones. It can be changed depending on the type of corporation you form and the nature of your business.

Step 1: Choosing a Corporate Name

The first step in starting a corporation is choosing an available name that complies with Oklahoma naming rules. Most states require that the name of a corporation be distinguishable from other registered business names and include a corporate designator such as “Corporation,” “Incorporated,” “Company,” or an abbreviation thereof.

Here are some guidelines you must follow while naming your corporation in Oklahoma-

  • Your business name must contain entity identifiers, such as “Incorporated,” “Limited,” “Corporation,” or “Company,” or an abbreviation, such as “Inc.,” “Co.,” or “Ltd.”
  • Exclude any words in your business name, such as “Trust,” “Bank,” “Credit Union,” or “Trustee,” or words related to a government agency, such as “FBI,” “State Department,” or “Treasury.”

To check the availability of your desired corporate name, you can search the Oklahoma Secretary of State‘s business name database and Business Name Search in Oklahoma. If the name is available, you may choose to reserve it for a specific period of 60 days by filing a name reservation application and paying the online name reservation fee of $25 and mail name reservation fee of $25. If your corporation plans to operate under a name other than its legal name, you may also need to register a fictitious or “doing business as” (DBA) name.

The DBA filing can be done by two methods, by mail and in person., which costs around $25. In addition, the DBA’s validity in Oklahoma is Indefinite, which you can file in Oklahoma Secretary of State.

You can check out How to File a DBA in Oklahoma for clearer understanding.

Step 2: Hire a Registered Agent

Hiring a Registered Agent is essential in starting a corporation. Registered Agent is a person or company responsible for receiving important legal documents, tax notices, and other correspondence on behalf of your corporation. They ensure that your corporation remains compliant with state regulations and requirements. There are Oklahoma Registered Agent Services to check in forming Oklahoma Corporation. We reviewed some of the best-registered agent services and provided features as an add-on with their packages.

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Step 3: Appointing Directors

Corporations in Oklahoma are required to have at least One directors, though some states may require more. Directors are responsible for overseeing the corporation’s management and making major decisions on behalf of the company. In Oklahoma, directors must be at least 18 years old and do not need to be state residents.

When appointing directors, it is essential to consider individuals who are knowledgeable, trustworthy, and capable of making sound business decisions. Maintaining a record of appointed directors, including their names, addresses, and terms of service, is also a good idea.

Step 4: Preparing and Filing Certificate of Incorporation

After you appoint the initial board of directors in your Oklahoma corporation, the next step is to write and file a Certificate of Incorporation. In writing, the Oklahoma Certificate of Incorporation, the corporation name, principal place of business, the purpose of business, Registered Agent contact information, and the names and addresses of incorporators and initial board members, should be written.

To officially form your Oklahoma corporation, you must prepare and file Certificate of Incorporation with the Oklahoma Secretary of State. The Certificate of Incorporation is a legal document that outlines essential information about your corporation, such as its name, address, purpose, and details about its stock.

The specific requirements for Certificate of Incorporation vary by state, but generally, the document must include the following:

  • The corporate name
  • The purpose of the corporation
  • The name and address of the registered agent
  • The names and addresses of the initial directors
  • The number of authorized shares and their par value
  • The name and address of the incorporator(s)

Once the Certificate of Incorporation are complete, please submit them to the Oklahoma Secretary of State’s office, along with the required filing fee. Fees vary by state, but in Oklahoma, the Certificate of Incorporation filing fee costs around $25 for online, by mail filing or in person filing.. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

  • Online Filing: Create an account/Log in to the SOS site, get the online form, fill it, and submit online
  • Offline filing: Send the form by mail or drop it off in person at Oklahoma Secretary of State, 421 N.W. 13th Suite 210, Oklahoma City, OK 73103

Step 5: Creating Corporate Bylaws

Now you are done filing Certificate of Incorporation in Oklahoma, the next step is to draft corporate bylaws. While not always required by law, creating corporate bylaws is essential in establishing Oklahoma corporation. Bylaws are the internal rules and regulations that govern the corporation’s operations and management. They outline the rights and responsibilities of directors, officers, and shareholders and provide guidelines for holding meetings and making decisions.

Key provisions to include in your corporate bylaws may include:

  • The corporation’s purpose and principal place of business
  • The roles and responsibilities of directors, officers, and shareholders
  • The process for appointing and removing directors and officers
  • The procedures for holding annual and special meetings
  • The methods for amending the bylaws and Articles of Incorporation
  • The procedures for issuing stock and maintaining shareholder records

Once the bylaws are drafted, they must be adopted by the corporation’s board of directors. Keeping a copy of the bylaws with your corporate records and updating them to reflect changes in the corporation or applicable laws is essential.

Step 6: Holding the Initial Board of Directors Meeting

The initial board of directors meeting is a crucial milestone for your Oklahoma corporation. During this meeting, the directors will adopt the corporate bylaws, elect officers, and make other key decisions to set the foundation for the corporation’s operations.

The agenda for the initial board meeting may include the following:

  • Adopting the corporate bylaws
  • Ratifying any pre-incorporation actions taken by the incorporator(s)
  • Electing corporate officers (e.g., president, vice president, secretary, treasurer)
  • Designating a corporate bank account
  • Authorizing the issuance of stock
  • Approving necessary licenses, permits, and tax registrations

It is essential to keep detailed minutes of the initial board meeting, documenting the decisions made and actions taken. These minutes should be stored with your corporate records.

Step 7: Issuing Stock

Corporations in Oklahoma are required to issue stock to their owners, also known as shareholders. When preparing to issue stock, you must determine the number of authorized shares and their par value, as outlined in your Certificate of Incorporation. You may choose to issue different classes of stock, each with its rights and privileges, such as voting rights and dividend preferences.

The process for issuing stock typically involves the board of directors approving a stock issuance resolution, determining the price per share, and recording the issuance in the corporation’s stock ledger. Maintaining accurate and up-to-date records of all stock transactions, including transfers and cancellations, is crucial to ensure proper ownership tracking and compliance with securities laws.

Step 8: Obtaining Required Licenses and Permits

Depending on the nature of your corporation’s activities and location, you may need to obtain various licenses and permits to operate legally. These may include federal, state, and local requirements, such as:

  • A Federal Employer Identification Number (EIN) for tax reporting and employee withholding purposes.
  • State sales and use tax registration, if your corporation sells taxable goods or services
  • Professional or occupational licenses for specific industries (e.g., healthcare, construction, food service)
  • Oklahoma Business Licenses, zoning permits, and health department approvals

Researching and obtaining all required Oklahoma licenses and permits before commencing operations and maintaining compliance with any ongoing renewal or reporting requirements is essential.

Step 10: Registering with State Tax Agencies

In addition to obtaining licenses and permits, your Oklahoma corporation may also need to register with various tax agencies. This may include registering for sales and use tax, obtaining an Employer Identification Number (EIN) in Oklahoma for payroll tax purposes, and filing state income tax and franchise tax returns.

An EIN will serve as the tax ID for your Oklahoma corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Oklahoma can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Each state has tax requirements, so consult a tax professional or Oklahoma Tax Commission for guidance on your specific obligations.

Step 11: Annual Reporting and Ongoing Compliance

Once your Oklahoma corporation is up and running, you must fulfill ongoing reporting and compliance requirements to maintain good standing. This may include filing Annual Report with the Oklahoma Secretary of State, updating your corporate records to reflect changes in directors or officers, and staying current on any required licenses or permits.

In addition, it is essential to stay informed about changes in corporate laws and regulations that may impact your business and to seek professional advice when needed.

Paying Your Taxes in Oklahoma

Even if you have established your corporation in Oklahoma, pay your taxes and keep everything up to date so you won’t pay any penalty. Unlike an LLC, there is a corporate tax that every corporation in Oklahoma has to pay. On the other hand, they must pay income taxes based on their business income. Some other types of taxes in Oklahoma are sales tax, franchise tax (not applicable to all the states), and other state taxes.

Cost of Forming a Corporation in Oklahoma

In forming a corporation in Oklahoma, a filing and Annual fee must be paid. Without it, your corporation won’t operate. A corporation’s initial filing fee may vary from state to state. However, in Oklahoma, it costs $25 for online, by mail filing or in person filing.. The corporation in Oklahoma also has to file an Annual Report (though it might not be mandatory, it is recommended to file one). Ensure you comply with all the necessary fees and costs so your corporation will run successfully and smoothly.

FAQs

What is a corporation in Oklahoma?
A corporation in Oklahoma is a legal entity created by individuals to conduct business in the state.
How do I start a corporation in Oklahoma?
To start a corporation in Oklahoma, you must file articles of incorporation with the Oklahoma Secretary of State.
Can I start a corporation by myself in Oklahoma?
Yes, you can start a corporation by yourself in Oklahoma.
What are the benefits of starting a corporation in Oklahoma?
Benefits of starting a corporation in Oklahoma include limited liability, tax advantages, and the ability to raise capital through stock sales.
What is the minimum number of people needed to start a corporation in Oklahoma?
One person can start a corporation in Oklahoma.
How long does it take to start a corporation in Oklahoma?
It takes about two to four weeks to start a corporation in Oklahoma.
How much does it cost to start a corporation in Oklahoma?
The cost to start a corporation in Oklahoma is $100.
Do I need a lawyer to start a corporation in Oklahoma?
You do not need a lawyer to start a corporation in Oklahoma, but it is recommended to ensure proper compliance with state laws.
What is the name requirement for a corporation in Oklahoma?
The name of a corporation in Oklahoma must include the word “corporation,” “incorporated,” “company,” or “limited.”
Can I reserve a name for my corporation in Oklahoma?
Yes, you can reserve a name for your corporation in Oklahoma for up to 60 days.
Do I need to file any other documents besides articles of incorporation to start a corporation in Oklahoma?
No, articles of incorporation are the only document required to start a corporation in Oklahoma.
What information do I need to include in the articles of incorporation for my corporation in Oklahoma?
You need to include the corporation’s name, registered agent’s name and address, number of authorized shares, and name and address of incorporator(s) in the articles of incorporation.
Does Oklahoma have a minimum capitalization requirement for starting a corporation?
No, Oklahoma does not have a minimum capitalization requirement for starting a corporation.
Can I change the articles of incorporation for my corporation in Oklahoma later?
Yes, the articles of incorporation for your corporation in Oklahoma can be amended later.
Do I need to have a board of directors or officers to start a corporation in Oklahoma?
No, you do not need to have a board of directors or officers to start a corporation in Oklahoma.
How do I obtain a federal tax ID number for my Oklahoma corporation?
You can obtain a federal tax ID number (EIN) for your Oklahoma corporation from the IRS.
Does Oklahoma have any special tax or regulatory requirements for corporations?
Oklahoma does have corporation income tax and other state-level taxes and regulations for corporations.
What is a registered agent in Oklahoma?
A registered agent is the person or entity that receives legal notices and process on behalf of a corporation in Oklahoma.
Can I be my corporation’s registered agent in Oklahoma?
Yes, you can be your corporation’s registered agent in Oklahoma with a valid Oklahoma street address.
Does the Oklahoma Secretary of State need to approve my corporation’s articles of incorporation?
Yes, the Oklahoma Secretary of State must approve your corporation’s articles of incorporation.
How often do I need to file an annual report for my Oklahoma corporation?
You need to file an annual report for your Oklahoma corporation every year.
Can I file the annual report for my Oklahoma corporation online?
Yes, you can file the annual report for your Oklahoma corporation online with the Oklahoma Secretary of State.
Will I need to pay additional fees or taxes when I file my annual report for my Oklahoma corporation?
Yes, there may be additional fees or taxes when you file your annual report for your Oklahoma corporation.
Can I dissolve my corporation in Oklahoma?
Yes, you can dissolve your corporation in Oklahoma by filing the necessary forms with the Oklahoma Secretary of State.
What other legal documents do I need to start a corporation in Oklahoma?
You may need a corporate bylaws, shareholder agreements, or operating agreements depending on the type and size of your corporation in Oklahoma.
Can I start a nonprofit corporation in Oklahoma?
Yes, you can start a nonprofit corporation in Oklahoma by filing for tax-exempt status with the IRS.
Do I need to appoint a president and CEO for my Oklahoma corporation?
No, there is no legal requirement to appoint a president and CEO for your Oklahoma corporation.
What liability protection does starting a corporation in Oklahoma provide?
Starting a corporation in Oklahoma provides limited liability protection for shareholders, meaning their personal assets are generally protected from business debts and legal liabilities.
What is a corporation?
A corporation is a legal business entity that is separate from its owners.
What information do I need to file my Articles of Incorporation?
You’ll need to provide the names of your corporation, the purposes of the corporation, and the names and addresses of your initial directors.
What is the fee to file Articles of Incorporation in Oklahoma?
The filing fee for Articles of Incorporation in Oklahoma is $100.
How long does it take to process a corporation filing in Oklahoma?
It typically takes 2-3 business days to process a corporation filing in Oklahoma.
Do I need to appoint a registered agent in Oklahoma?
Yes, you’ll need to appoint a registered agent located in Oklahoma to receive important legal documents on behalf of your corporation.
What is an EIN?
An EIN is a unique nine-digit number issued by the IRS that is used to identify your corporation for tax purposes.
How do I obtain an EIN for my corporation in Oklahoma?
You can get an EIN by applying online through the IRS website or by filing Form SS-4 by mail or fax.
Is there a fee to obtain an EIN?
No, obtaining an EIN is free of charge.
Does Oklahoma have a corporate income tax?
Yes, Oklahoma has a corporate income tax of 6%.
What other taxes do I need to be aware of in Oklahoma?
You may need to pay sales tax, employment taxes, and excise taxes based on the nature of your business.
Do I need to file annual reports in Oklahoma?
Yes, you’ll need to file an annual report with the Oklahoma Secretary of State by July 1st each year.
What happens if I don’t file my annual report on time?
If you don’t file your annual report on time, your corporation may be administratively dissolved by the state.
Do I need to have a board of directors in a corporation?
Yes, a corporation must have a board of directors that oversees the management of the company.
How many directors are required for an Oklahoma corporation?
An Oklahoma corporation must have at least one director.
Can I have employees in a corporation?
Yes, you can have employees in a corporation, and you’ll need to comply with Oklahoma employment laws.
What type of liability protection does a corporation offer?
A corporation provides limited liability protection, which means that the owners are not generally personally liable for the debts and obligations of the corporation.
What is a Bylaws agreement?
A Bylaws agreement is a legal document that outlines the internal rules and procedures for running your corporation.
Do I need to have Bylaws for my Oklahoma corporation?
Yes, you’ll need to create and adopt Bylaws for your Oklahoma corporation.
How do I modify my Bylaws?
You can modify your Bylaws agreement by following the procedure outlined in the original document, typically by calling a meeting and obtaining sufficient votes from shareholders.
Can I change my corporation to an LLC in Oklahoma?
Yes, you can change your corporation to an LLC in Oklahoma by filing a Certificate of Conversion with the Secretary of State.
Do I need a business license to operate my corporation in Oklahoma?
You may need to obtain a state or local business license based on the nature of your business.
Can I form a single-member Oklahoma corporation?
Yes, you can form a single-member corporation in Oklahoma.
How do I close my Oklahoma corporation?
You’ll need to file Articles of Dissolution with the Oklahoma Secretary of State to formally close your corporation.
Can I reinstate my dissolved Oklahoma corporation?
Yes, you can file an Application for Reinstatement with the Oklahoma Secretary of State to restore your dissolved corporation.
Do I need to provide financial statements with my Articles of Incorporation?
No, you are not required to provide financial statements with your Articles of Incorporation in Oklahoma.
Can I redomesticate my corporation to or from Oklahoma?
Yes, you can redomesticate your corporation to or from Oklahoma by filing the necessary paperwork with the Secretary of State.

Also Read

How to Save Money While Forming Your Oklahoma Corporation

One of the first steps in forming a corporation is to choose the right structure. While it may be tempting to opt for a more complex structure with multiple layers of ownership and control, these structures often come with higher costs and ongoing maintenance fees. Instead, consider starting with a simple structure, such as a basic corporation or limited liability company (LLC), and then scaling up as your business grows.

Another way to save money is to handle as much of the formation process yourself as possible. While it may be advisable to consult with a lawyer or accountant for guidance, there are many resources available online that can help you navigate the process without incurring high legal fees. Many state websites offer step-by-step guides and downloadable forms that can streamline the process and save you money on legal expenses.

When it comes to filing fees, many states, including Oklahoma, offer lower rates for online filings compared to traditional paper filings. By completing your paperwork online, you can take advantage of these reduced rates and save money that can be reinvested back into your business. Additionally, be sure to research any available discounts or fee waivers for certain types of businesses or individuals, as these can further reduce your upfront costs.

As you prepare your formation documents, consider drafting them yourself or using online templates instead of hiring a lawyer to do it for you. While it is important to ensure that your documents are legally sound, there are many resources available that can help guide you through the process and save you money on legal fees. Additionally, consider taking advantage of free resources offered by the Small Business Administration or other government agencies that provide guidance on forming a corporation.

Once your corporation is officially formed, be mindful of ongoing maintenance costs. While it may be necessary to hire professionals for certain tasks, such as annual reports or tax filings, there are many routine maintenance tasks that you can handle yourself to save money. Make sure to stay informed about any annual fees or filings required by the state of Oklahoma and set reminders to ensure you stay in compliance and avoid late fees.

Forming a corporation in Oklahoma can be a great way to protect your business and position it for future growth. By taking a proactive approach to saving money during the formation process, you can keep your upfront costs low and set your business up for long-term success. With a little research, organization, and resourcefulness, you can save money while forming your Oklahoma corporation without sacrificing quality or compliance.

Conclusion

Starting a corporation in Oklahoma involves several critical steps, from choosing a corporate name to fulfilling ongoing compliance requirements. Following the steps outlined in this guide and seeking professional advice when needed, you can successfully establish your Oklahoma corporation and enjoy the benefits of limited liability, potential tax savings, and a professional business image.

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