Starting a Corporation in West Virginia | What You Need to Know

Start a Corporation in West Virginia

In West Virginia, 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 West Virginia, 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 West Virginia.

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 West Virginia?

A corporation in West Virginia 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 West Virginia are required to have at least Three directors. One of the main advantages of a corporation in West Virginia 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 West Virginia 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 West Virginia if you would like to provide limited liability protection to your shareholders rather than West Virginia 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 West Virginia

To start a corporation in West Virginia, you must follow the below steps that, include choosing a corporate name, hiring a Registered Agent, appointing directors, filing for Articles 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 West Virginia 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 West Virginia-

  • 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 West Virginia Secretary of State‘s business name database and Business Name Search in West Virginia. If the name is available, you may choose to reserve it for a specific period of 120 days by filing a name reservation application and paying the online name reservation fee of $15 and mail name reservation fee of $15. 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 West Virginia is Indefinite, which you can file in West Virginia Secretary of State.

You can check out How to File a DBA in West Virginia 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 West Virginia Registered Agent Services to check in forming West Virginia 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 West Virginia are required to have at least Three 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 West Virginia, 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 Articles of Incorporation

After you appoint the initial board of directors in your West Virginia corporation, the next step is to write and file a Articles of Incorporation. In writing, the West Virginia Articles 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 West Virginia corporation, you must prepare and file Articles of Incorporation with the West Virginia Secretary of State. The Articles 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 Articles 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 Articles of Incorporation are complete, please submit them to the West Virginia Secretary of State’s office, along with the required filing fee. Fees vary by state, but in West Virginia, the Articles of Incorporation filing fee costs around $25 for online and by mail 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 e-form, fill it, and submit online. Or get the online PDF, fill it up and upload it back on the site.
  • Offline filing: Send the form by mail to Eastern Panhandle Business Center, 229 E. Martin St., Martinsburg, WV 25401

Step 5: Creating Corporate Bylaws

Now you are done filing Articles of Incorporation in West Virginia, the next step is to draft corporate bylaws. While not always required by law, creating corporate bylaws is essential in establishing West Virginia 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 West Virginia 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 West Virginia 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 Articles 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)
  • West Virginia Business Licenses, zoning permits, and health department approvals

Researching and obtaining all required West Virginia 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 West Virginia 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 West Virginia for payroll tax purposes, and filing state income tax and franchise tax returns.

An EIN will serve as the tax ID for your West Virginia 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 West Virginia 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 West Virginia State Tax Department for guidance on your specific obligations.

Step 11: Annual Reporting and Ongoing Compliance

Once your West Virginia 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 West Virginia 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 West Virginia

Even if you have established your corporation in West Virginia, 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 West Virginia has to pay. On the other hand, they must pay income taxes based on their business income. Some other types of taxes in West Virginia are sales tax, franchise tax (not applicable to all the states), and other state taxes.

Cost of Forming a Corporation in West Virginia

In forming a corporation in West Virginia, 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 West Virginia, it costs $25 for online and by mail filing. The corporation in West Virginia 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 West Virginia?
A corporation in West Virginia is a legal entity that is created for any lawful business purpose.
How do I start a corporation in West Virginia?
You can start a corporation in West Virginia by filing articles of incorporation with the West Virginia Secretary of State.
What must be included in the articles of incorporation for a West Virginia corporation?
The West Virginia articles of incorporation must include the corporation’s name, the name and address of the registered agent, and the names and addresses of the initial directors of the corporation.
Do I need to appoint a registered agent for my West Virginia corporation?
Yes, all West Virginia corporations must have a registered agent who is located within the state.
How much does it cost to file articles of incorporation for a West Virginia corporation?
The filing fee for the West Virginia articles of incorporation is $100.
How long does it take to create a West Virginia corporation?
It typically takes around seven to ten business days for the West Virginia Secretary of State to process the articles of incorporation and create the corporation.
Can I create a West Virginia corporation online?
Yes, you can create a West Virginia corporation online through the West Virginia Secretary of State’s website.
Is there a minimum number of shareholders required for a West Virginia corporation?
No, there is no minimum number of shareholders required for a West Virginia corporation.
How often must a West Virginia corporation hold shareholder meetings?
A West Virginia corporation must hold a shareholder meeting at least once a year, but it can be more frequent if desired.
What is the maximum number of shareholders permitted for a West Virginia closely held corporation?
A West Virginia closely held corporation is limited to 35 shareholders.
What is the corporate income tax rate in West Virginia?
The corporate income tax rate in West Virginia is currently 6.5%.
Does West Virginia offer any tax incentives for corporations?
Yes, West Virginia offers several tax incentives for corporations, including tax credits for job creation and investment in certain areas.
What is the minimum wage in West Virginia?
The minimum wage in West Virginia is $8.75 per hour.
How do I obtain a business license in West Virginia?
You can obtain a business license in West Virginia by contacting the county clerk or city clerk where your business will be located.
What is the annual report requirement for a West Virginia corporation?
A West Virginia corporation is required to file an annual report with the Secretary of State on or before July 1st of each year.
Can I file my West Virginia corporation’s annual report online?
Yes, you can file your West Virginia corporation’s annual report online through the West Virginia Secretary of State’s website.
What happens if I do not file my West Virginia corporation’s annual report?
If you do not file your West Virginia corporation’s annual report, your corporation may be administratively dissolved or revoked.
What is the process for changing a West Virginia corporation’s name?
To change a West Virginia corporation’s name, you must file articles of amendment with the Secretary of State.
What is a foreign corporation in West Virginia?
A foreign corporation in West Virginia is a corporation that was created in a state other than West Virginia.
Do foreign corporations need to register in West Virginia?
Yes, foreign corporations must register with the West Virginia Secretary of State before conducting business in the state.
Is there a fee for registering a foreign corporation in West Virginia?
Yes, the fee for registering a foreign corporation in West Virginia is $100.
What is a certificate of authority in West Virginia?
A certificate of authority in West Virginia is a document that authorizes a foreign corporation to do business within the state.
How long does it take to obtain a certificate of authority in West Virginia?
It typically takes around seven to ten business days for the West Virginia Secretary of State to process a certificate of authority application.
Can I expedite the processing of my West Virginia corporation’s certificate of authority?
Yes, you can pay an expedited fee to have your West Virginia corporation’s certificate of authority processed more quickly.
What is a West Virginia professional corporation?
A West Virginia professional corporation is a corporation that is formed to provide a professional service, such as accounting or legal services.
Are there specific requirements for forming a West Virginia professional corporation?
Yes, a West Virginia professional corporation must meet additional requirements, such as having all shareholders be licensed professionals in the field in which the corporation operates.
Can a West Virginia professional corporation shield its employees from individual liability?
No, a West Virginia professional corporation cannot shield its employees from individual liability for professional malpractice.
When will my West Virginia corporation be considered “in good standing” with the state?
Your West Virginia corporation will be considered “in good standing” if it is up to date on all of its filings and fees with the Secretary of State.
What is the minimum number of people required to form a corporation in West Virginia?
You only need one person to form a corporation in West Virginia.
How much does it cost to start a corporation in West Virginia?
The cost to start a corporation in West Virginia is $100.
What is the corporate tax rate in West Virginia?
The corporate tax rate in West Virginia is 6.5%.
How long does it take to form a corporation in West Virginia?
It typically takes between 7-10 business days to form a corporation in West Virginia.
What types of corporations can be formed in West Virginia?
You can form a C corporation, S corporation, or non-profit corporation in West Virginia.
Do I need a lawyer to form a corporation in West Virginia?
No, you can file the formation documents yourself, but it is recommended to consult with a lawyer.
What kind of documentation is required to form a corporation in West Virginia?
You will need to file Articles of Incorporation with the West Virginia Secretary of State.
Can I form a corporation online in West Virginia?
Yes, you can file online through the West Virginia Secretary of State website.
Can I file the Articles of Incorporation for my corporation in West Virginia myself or do I need a registered agent?
You can act as your own registered agent, but it is recommended to work with an established registered agent service for greater ease and peace of mind.
Is there anything specific I need to include in my Articles of Incorporation for my West Virginia corporation?
Yes, you’ll need to specify the name of the corporation, the purpose of the corporation, the various classes of shares that the corporation can issue, the name and address of the registered agent, and the names and addresses of each of the initial directors.
Is there a residency requirement to form a corporation in West Virginia?
No residency is required to form a corporation in the state of West Virginia.
Do I need a business license to form a corporation in West Virginia?
Yes, you will need to apply for a business license with the West Virginia state tax department.
Do I need a federal tax ID number to form a corporation in West Virginia?
Yes, you will need a federal tax ID number, or FEIN, to form a corporation in West Virginia.
Can foreigners form a corporation in West Virginia?
Yes, foreigners can form a corporation in West Virginia.
Are there any annual reporting requirements for a corporation in West Virginia?
Yes, corporations in West Virginia are required to file an annual report with the Secretary of State.
Does West Virginia have a franchise tax that I need to pay for my corporation?
Yes, West Virginia has a franchise tax that is required for all corporations formed in the state.
Is there a specific name I must choose for my corporation in West Virginia?
Yes, the corporation’s name must end with the words “corporation,” “incorporated,” “company,” “limited,” or their abbreviations.
Can I change the name of my corporation in West Virginia?
Yes, you can change the name of your corporation at any time, as long as the new name complies with state rules and requirements.
What other taxes or fees might apply to a corporation in West Virginia?
Corporations in West Virginia may be subject to taxes and fees related to holding permits, collecting and paying sales tax, unemployment insurance, income tax, and more.
Do I need board meetings if I incorporate in West Virginia?
Yes, one of the requirements of West Virginia incorporation is to hold and document regular board meetings.
Do I need to purchase any insurance after the incorporation process?
Yes, it is recommended to purchase business insurance in order to protect your employees and business operations.
When should I start payroll if I form a corporation in West Virginia?
You should start payroll as soon as your corporation begins operations.
What if a corporation is founded with one objective and then shifts to another after it’s formed?
The corporation may be amended so long as articles of amendment are filed providing prior notice to stakeholders and explaining the alteration.
Can I hire a professional registered agent in West Virginia?
Yes, you may hire a professional registered agent in West Virginia.
Where can I obtain more resources on incorporating in West Virginia?
More compact information is provided by the West Virginia Secretary of State’s office, business incubation centers, or local careers offices that work in fostering entrepreneurship within the State.
After I incorporate in West Virginia, where can I find helpful resources for remaining compliant?
The Secretary of State provides a helpful business services manual, or business support centers are an ideal option for relevant and tailored resources after incorporation.

Also Read

How to Save Money While Forming Your West Virginia Corporation

One of the most straightforward ways to save money when forming your corporation is to do your research. Take the time to understand the various types of corporations available in West Virginia, such as C-corporations, S-corporations, and limited liability companies (LLCs), and choose the one that best fits your business needs. Each type of corporation has its own advantages and disadvantages, so it’s crucial to make an informed decision based on your specific circumstances.

Another way to save money is to consider using online services or tools to help you with the incorporation process. Online incorporation services often offer packages that include all the necessary documents and filings for a fraction of the cost of hiring a lawyer or an accountant. While it’s essential to seek professional advice when necessary, using online services can be a cost-effective way to get your West Virginia corporation up and running.

Additionally, timing can play a significant role in saving money when forming your corporation. West Virginia, like many other states, has specific requirements and deadlines for filing paperwork and paying fees. By staying organized and keeping track of important dates, you can avoid late fees and penalties that can add to the overall cost of forming your corporation.

Moreover, consider networking within your local business community to find cost-effective resources and services for your corporation. Building relationships with other entrepreneurs, accountants, lawyers, and business advisors can help you access discounts or special deals that can help you save money during the incorporation process. Collaborating with peers who have been through the process can also provide valuable insights and tips on how to navigate the complexities of forming a corporation in West Virginia.

Lastly, don’t forget to take advantage of any tax breaks or incentives that may be available to you as a new business owner in West Virginia. Research state and federal tax regulations to see if your corporation qualifies for any deductions or credits that can help offset some of the costs associated with forming your corporation.

In conclusion, while forming a West Virginia corporation can be a substantial financial investment, there are various ways to save money during the process. By doing your research, utilizing online services, staying organized, networking within your community, and exploring tax incentives, you can minimize expenses and make the incorporation process more affordable. With the right knowledge and strategies in place, you can successfully establish your West Virginia corporation without breaking the bank.

Conclusion

Starting a corporation in West Virginia 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 West Virginia corporation and enjoy the benefits of limited liability, potential tax savings, and a professional business image.

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