A nonprofit organization must file an articles of incorporation before doing any of its other activities. This includes filing a certificate of good standing, paying taxes, and establishing bank accounts. There are several steps involved in the creation of a nonprofit corporation, including registering a new corporate name, applying for a state tax identification number, opening a checking or savings account, and obtaining a Federal Employer Identification Number (EIN). After completing all of those steps, you will be able to conduct business under the new name.
The South Carolina Secretary of State maintains information about registered corporations, nonprofits, and limited liability companies. You can find out how to open a corporation here.
You can learn more about the requirements for forming a nonprofit corporation here.
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An incorporated company can limit the liability of directors, officers, and shareholders. This is called incorporation. You must file an annual report to maintain your corporate status. Once you are incorporated, you can apply for tax exempt status under section 501(c)(3). This lets you raise money for charitable purposes.
How to Fill Out the Articles of Incorporation
The articles of incorporation are the foundation of every corporation. They lay out the rules under which the corporation operates. If you’re starting a new business, it’s important to file the articles of incorporation as soon as possible. You’ll need to do this even if you plan to incorporate later. Once incorporated, you’ll still need to keep up with the annual renewal requirements.
If you’re thinking about incorporating, here’s what you need to know:
1. Choose Your Business Structure
You can choose among three different types of corporations: sole proprietorship, partnership, and limited liability company (LLC). Each type has pros and cons, so make sure you understand the differences before choosing one.
2. File Articles of Incorporation
A registered agent must sign the articles of incorporation. This makes the corporation legally responsible for fulfilling legal obligations such as paying taxes and making contracts.
3. Pay Annual Fees
Domestic (In-State) vs. Foreign (Out-of-State) For-Profit Articles of Incorporation
Foreign corporations are required to file an application for a “certificate of authority” before doing business in South Carolina. This document allows the state to determine whether the foreign corporation is authorized to do business in South Carolina. If the foreign corporation does not comply with the requirements of the law, it risks losing its ability to conduct business in South Carolina. In addition, foreign corporations must file a form known as “Certificate of Good Standing” or “Certificate of Authority” within 30 days following the date of incorporation. Failure to file either document could lead to fines, suspension of corporate powers, or dissolution of the corporation.
A foreign corporation must obtain a “license” if it intends to engage in certain types of activities in South Carolina. These include selling goods or providing services in South Carolina, soliciting customers in South Carolina, owning property in South Carolina, conducting business in South Carolina, maintaining offices in South Carolina, or having employees working in South Carolina. There are exceptions to each of these rules; however, most businesses will want to consult a lawyer prior to incorporating in order to avoid costly mistakes.
Breakdown of Required
South Carolina Articles of Incorporation
The articles of incorporation are the basic documents that establish a corporation. They contain the following information:
• Name of the corporation;
• Address of the principal place of business;
• Type of Choosing entity;
• Date of formation;
• Names of directors and officers;
Choosing a Name
The name Choose you choose reflects how your company operates. You want Optional it to convey a clear idea about Include what you do. A good name will help customers find How you online, make it easier for people to remember you, and make it easy for others to find you. And it won’t cost anything extra to register your domain name.
A great name is one that contains keywords related to your product or service. For example, “Carpet Cleaning Service.” If you’re selling carpet cleaning equipment, the keyword here is “carpet,” and “cleaning service” is just another way of saying the same thing. Your customers are searching for those terms.
Avoid common words like “the,” “a,” “an,” and “and.” These words don’t tell anyone much about what you offer. Instead, try something like “Home Improvement Company.” This tells someone exactly what you do, and makes it easy to remember.
Finally, include the proper designation for your type of organization. In this case, we’d say “company” rather than “business.”
Choosing a registered agent
A registered agent is a person or entity designated by a foreign corporation to receive legal notices, process documents, and file corporate papers on behalf of the corporation. In some states, it is mandatory for corporations to register agents.
In most cases, registering an agent requires filling out a form and paying a fee. You must choose a registered agent carefully because he or she will represent your company in court, sign contracts, pay taxes, and handle many other important tasks. You could face serious consequences if you do not select a registered agent properly.
The following are three things to consider when choosing a registered agent:
1. Does the state require registration?
2. Is there someone already serving as your registered agent?
3. Do you know how to contact the registered agent?
If you are unsure about whether your state requires registration, check with the Secretary of State’s Office. Some states require companies to appoint a registered agent upon incorporation. Others allow companies to register agents later. Check with your state’s Secretary of State’ s Office to determine what is required.
Optional Form Questions
Question 2 asks whether the corporation is required to file a form with the IRS. If it does, what type of form must it use?
The optional form questions give you more control over how much information you want to disclose. You can choose to answer one or multiple questions. For example, you might ask if you have to report certain transactions and types of income. Or you could include questions about your employees’ salaries and bonuses.
You can also set up a questionnaire that includes several different questions. For example, you could ask customers to provide contact information and payment methods if you sell products online. Then, you could collect that data and send it to the customer via email.
In addition to helping you gather information, the optional questions make it easier for customers to communicate with you. They also make it easier for you to respond to inquiries.
Include supplemental form(s)
Foreign entities must include a copy of the certificate of incorporation or similar documentation regarding the corporation’s formation along with the Articles of Incorporation. This is necessary because the filing requirements vary based on the type of entity being formed. For example, domestic corporations must file one set of Articles of Incorporation and one annual report; foreign corporations must file both documents.
The following documents are typically included in the filings:
• Certificate of Incorporation — A certificate evidencing the creation of a corporation under the laws of the jurisdiction where it is incorporated.
• Organizational Minutes — A record of meetings held during the organization process.
• Bylaws — Rules governing the internal operations of the corporation.
• Authority to Execute Documents — An authorization allowing officers to sign corporate documents.
• List of Directors and Officers — A list of individuals authorized to act on behalf of the corporation.
How to Submit the Form
The process of incorporating a business is simple. You just need to fill out a form. But it doesn’t come cheap. If you’re looking to incorporate a business, here are some things you’ll want to know about the cost of doing so.
There are three basic steps involved in forming a corporation. First, you must file the Articles of Incorporation. This includes filling out the necessary forms and paying the appropriate fees. Second, you must register the name of your newly formed corporation with the state. Third, you must pay the annual franchise tax.
If you’re incorporated in Delaware, the total cost of incorporating is $150. In California, the costs are $100. And in New York, the costs are $50. Depending on where you live, the filing fees vary, too. For example, in New Jersey, the filing fee is $75. In Pennsylvania, the filing fee is around $60.
Incorporating a business isn’t free. But it does provide several benefits. One of those benefits is the ability to protect yourself against lawsuits. Another benefit is the ability to limit liability. And finally, incorporating allows you to take advantage of certain tax breaks.
The end of the year is always busy for us here at BizFilings.com. As we wrap up 2018, there seem to be many questions about what happens next. Will there be another tax reform bill? Will the government shutdown continue? What does the future hold for cryptocurrencies? One thing is certain: 2019 promises to bring plenty of changes to the world of small businesses. So let’s take a look at some predictions for the coming year.
- Small Business Taxes
As we close out 2018, one issue that continues to dominate headlines is whether Congress will pass legislation to repeal and replace the Affordable Care Act. While that debate rages on, lawmakers are also working on several smaller pieces of legislation related to taxes. Among those bills are proposals to cut taxes for individuals and families, lower corporate rates, simplify the tax code, and eliminate loopholes.
- More States Pass Online Sales Tax Legislation
Last month, New York became the latest state to approve online sales tax legislation. According to the National Conference of State Legislatures, 20 states plus D.C. have passed similar laws. These measures allow retailers to collect sales tax regardless of where customers live and buy goods. This could mean big money for local governments. For example, California estimates that collecting online sales tax could generate nearly $1 billion annually.
Frequently Asked Questions
Are there any specifics you can or can’t include with a South Carolina Corporation amendment?
The South Carolina Secretary of State’s Office says it cannot provide specific instructions about what information should be included with an article of amendment. A representative told us, “We do not have any rules regarding how many words are required, nor does the law specify whether the amendment must be filed electronically.” However, the office did offer some general guidance. For example, the secretary of state recommends including the following information:
• Name of the corporation;
• Address of principal place of business;
• Name and location of a registered agent;
• Accounting period;
• List of directors and officers;
• Description of corporate purpose;
• Any special provisions or restrictions on the use of the corporate name; and
• Information about any pending litigation involving the corporation.
How much does a South Carolina Corporation amendment cost?
The filing fee for articles of amendments is $110. If you want to amend the Articles of Incorporation, it costs $110 plus state fees. This includes the state filing fee, county filing fee, and city/town filing fee. You must pay the filing fee before you file the amendment. Once filed, the amendment becomes effective immediately.
If you are filing the amendment because of a name change, you do not have to pay the $110 filing fee. But you still have to pay the state and local fees.
You cannot pay the filing fee online; you must mail a check payable to “South Carolina Secretary of State.”
How long does it take the state to process a South Carolina Corporation amendment?
South Carolina requires that amendments to articles of incorporation be filed with the Secretary of State within 10 days of publication. If you want to amend your corporation’s articles, you must file an application form with the Secretary of State. You can do this online, or you can send your completed form to the office. Once the secretary receives your request, he or she will review it and issue a receipt confirming that the application has been received. After receiving the receipt, the secretary will start processing the amendment. There are no deadlines for filing amendments with the secretary of state. However, there is usually a delay because the secretary is very busy during the summer months.
The secretary of state will assign a case number to your application once it is processed. This case number will allow you to track the status of your application. You can check the status of your application online by entering the case number into the search box. For example, here is how you would enter the case number for a pending application.
How will the South Carolina Corporation amendment be returned?
The South Carolina Secretary of State’s office has clarified how the state will return amendments submitted under the federal government’s recent rule change requiring states to submit proposed amendments twice. In a statement posted to Facebook, the agency says it will send a copy of the amendment back to the person submitting it along with a stamp-paid, self-addressed envelope. This way, the original submission will remain in the hands of the person making the amendment while the copy goes out to the SOS.
James Rourke is a business and legal writer. He has written extensively on subjects such as contract law, company law, and intellectual property. His work has been featured in publications such as The Times, The Guardian, and Forbes. When he’s not writing, James enjoys spending time with his family and playing golf.