Start an Oklahoma Corporation

Are you considering launching your new business venture as an Oklahoma corporation? Regardless of your reason for wanting to incorporate in Oklahoma, we have the steps to help you get there.

To start a corporation in Oklahoma, you must file the Certificate of Incorporation with the Secretary of State. To simplify the process of forming a corporation in the state of Oklahoma, we’ve put together the following steps to form your business. We’ll also talk through the nuances of forming an Oklahoma professional corporation (PC), a specialized corporation for licensed professionals like doctors, engineers, or attorneys.

Step 1: Name your Oklahoma corporation

Choose a name for your Oklahoma corporation. Brainstorming a name for your new business can be fun, but just remember that you must conform to Oklahoma corporation naming guidelines. If the Secretary of State rejects your business name, your entire Oklahoma corporation filing will be rejected. You’ll have to start the whole process over, which is both a pain and a delay.

Find a name that’s unique, tells people who you are and what you offer, and resonates with your target market. For both marketing and legal reasons, your new business’s name must be distinguishable from other business names in the records of the Oklahoma Secretary of State. Slight variations in spelling, punctuation, and suffix won’t cut it. 

Conduct an Oklahoma business name search

Make a list of possible names, and then follow the instructions for searching for business names on our Oklahoma Business Entity Search page. To garner more results (and to make sure the name isn’t too close to another business), just enter the key portions of the name. The more detailed your query, the fewer results you’ll receive.

You can also check on the availability of your desired company name by telephoning the Secretary of State at (405) 522-2520.

If you wish to reserve the name before you incorporate, you will need to pay a reservation fee of $10. Your entity name will be reserved for up to 60 days. 

The corporation name must contain one of these words or abbreviations: 

• Limited 
• Syndicate 
• Union 
• Society 
• Institute
• Incorporated 
• Fund 
• Foundation 
• Club 
• Corporation 
• Company 
• Association 
• Co.
• Corp.
• Inc.
• Ltd.

Naming an Oklahoma Professional Corporation

If you’re naming a professional corporation, you’ll need to follow the rules we’ve listed above, with a few extra considerations. For starters, you need to add the term “professional” to the designator you choose, creating a name that includes something like “professional corporation” or “professional association,” for example. You could also use the abbreviation “PC” if you prefer.

You should also confirm that your name complies with any business naming rules enacted by your industry. These can vary from one profession to another, so please check with your licensing agency for your requirements.

Trademarks and Your New Business Name

A trademark isn’t required for your business name, but researching trademarks at the federal and state levels can help you determine whether your name is infringing on existing trademarks. You can search the federal and state trademark databases to make sure you’re in the clear, and you can even apply for a trademark of your own.

Secure your business domain name

Another consideration when naming your company is a domain name. A domain name is your business’s address on the internet, a unique name that you can claim through a domain registrar. Most, if not all, businesses will want a website with an identifying domain name.

Getting a DBA for Your Corporation

In addition to an entity name, some businesses may want to use a “doing business as” (DBA), also known as a trade name. Oklahoma requires you to file for a trade name if you want to do business under a name other than your business’s legal name. Trade names do not provide legal protection by themselves, nor do they establish a separate legal entity. You can apply for one online or by mail.

Step 2: Appoint directors

Oklahoma requires corporations to have one or more directors. When filing the Certificate of Incorporation, you will need to include the directors’ addresses and names. These initial directors will manage the corporation for its first year. The shareholders will then appoint directors at an annual meeting.

The board of directors is responsible for governing the corporation. For this reason, they have rights and powers that should be outlined. 

As noted earlier, the number of the board of directors must legally be one or more individuals. However, each corporation can create its own regulations, provided they stay within the law. If a corporation wants a minimum of five directors, they could add this regulation to the corporate bylaws. 

All in all, the rules for the board of directors can vary from corporation to corporation because each corporation can add specifics in its corporate bylaws.

Step 3: Choose an Oklahoma registered agent

Next, you’ll want to choose a registered agent. In Oklahoma, all corporations will need to appoint and maintain a registered agent. Your registered agent must have a registered office with an Oklahoma street address (not a P.O. box) and be available there during normal business hours, Monday through Friday. In the case of a lawsuit, litigation papers will go to your registered agent. If the agent is not there, your corporation could face fines and penalties. 

A registered agent in Oklahoma must be:

• Able to quickly relay any legal documents to your business
• A resident of Oklahoma or a domestic corporation, qualified foreign corporation, limited liability company, or limited partnership authorized to do business in Oklahoma
• Available during business hours 
• Able to accept legal documents and state correspondence on behalf of the corporation

Step 4: File the Oklahoma Certificate of Incorporation

Oklahoma requires every corporation to file a Certificate of Incorporation, often referred to as the Articles of Incorporation in other states. To file the Certificate of Incorporation, you can choose to complete the process online or by mailing a PDF form. 

The filing fee for either method is $50 if you have $50,000.00 or less in total authorized capital (TAC). You get the TAC by multiplying the number of shares by the par value of each share. If your TAC does exceed $50,000.00, the fee is $1.00 per $1,000.00. Once the Secretary of State receives the filing fee, they can approve the certificate.

When filing this certificate, you will need to provide: 

• Whether the business is a benefit corporation
• Corporation name 
• Principal business address
• Names and addresses of the incorporators 
• Directors
• Name and address of registered agent 
• Authorized capital (shares of stock and the value of each share)
• Email address
• Business purpose. The state allows you to keep it general, such as “to engage in any lawful act or activity for which corporations may be organized under the general corporation law of Oklahoma.”
• Duration of the company. Some corporations have a limited period of existence, while others are created for an unlimited duration.

For those who choose to mail their form, you can send it to:

Oklahoma Secretary of State
421 NW 13th St, Suite #210 
Oklahoma City, OK 73103

Certificate of Incorporation for an Oklahoma PC

Oklahoma has a separate Certificate of Incorporation form if you’re filing to be a professional corporation. One difference is that, for the business’s purpose, you must specify the professional service (there can only be one) that your corporation will be providing. In addition, you’ll need to attach a certificate from the regulating board of your profession certifying that all of the owners and managers of the PC are licensed to practice that professional service.

Step 5: Create corporate bylaws

Oklahoma also requires every corporation to have bylaws. Corporate bylaws are a legal document written by the initial shareholders that detail how the company will operate, outlining the duties and responsibilities of owners and the corporation’s management style. For professional corporations, bylaws must follow regulations specific to the profession and ensure compliance with state laws governing professional services.

Bylaws usually include: 

• Business name 
• Business purpose 
• Principal location 
• Rules for board members
• Guidelines for the board of directors 
• How committees are appointed and run 
• Selection, powers, and responsibilities of officers 
• Meeting requirements 
• How to handle conflict of interest 
• Procedures for replacing members of the board of directors
• Rules for amending bylaws  

Step 6: Draft a shareholder agreement

A shareholder agreement spells out the rights and obligations of the shareholders. Once you’ve completed the shareholder agreement, you’ll want to keep it with other corporate records to reference.

The shareholder agreement can cover things like:

• The number of shares issued
• Shareholder voting rights 
• Restrictions on transferring shares
• Rules for who can purchase shares
• Procedures if the company is sold

Step 7: Issue shares of stock

One of the requirements for starting a corporation is issuing stock. When you filed your Certificate of Incorporation, you stated the number of stock shares authorized. You’ll need to estimate how much capital you require before issuing shares of stock so that you can determine a reasonable value for each share. 

Keep in mind that each share is only issued once. Although it’s not typically required, most corporations issue certificates to shareholders, indicating their shares. 

Stock may be issued publicly or privately. Privately issued stock is usually issued to the founders, managers, employees, or a private group of investors. A public corporation makes a portion of its stock shares available for public purchase.

Companies that issue public stock need to file quarterly statements with the U.S. Securities and Exchange Commission (SEC). The SEC protects investors and creates a safer stock market. Corporations must file with the SEC to ensure that all shares of stock are properly documented.

Issuing Shares as a Professional Corporation

Under Oklahoma state law, professional corporations may only issue shares to individuals who are licensed in the corporation’s stated profession. If, for some reason, a shareholder ceases to be licensed (non-compliance, retirement, etc.), they must promptly transfer their shares to a qualified shareholder.

Step 8: Apply for necessary business permits or licenses

The next step is to apply for licenses and permits. Oklahoma doesn’t require a general business license. However, depending on the type of business, licenses and permits can vary. Certain industries, like electrical, plumbing, public pool, and more, require licenses. 

In addition to state licenses, your corporation may be subject to federal licenses and permits. Not every business needs federal licenses or permits. In fact, many do not. However, certain business activities, like agriculture, aviation, and alcohol, require federal permits. 

We suggest doing your due diligence on what is needed at the local, state, and federal levels regarding business permits and licenses. This step is especially important for professional corporations, which need licenses for their shareholders, managers, and any employees who administer their professional services.

Step 9: File for an EIN and review tax requirements

The Employer Identification Number (EIN) can be applied for on the IRS website for free. An EIN is required by law for all corporations. Applying for an EIN online is the fastest way to get your number, but you can apply via mail or fax if it is more convenient.

All corporations are subject to federal taxes. In addition to federal taxes, corporations in Oklahoma must pay an income tax. The only corporations that do not have to pay income tax are those registered as pass-through entities, such as S corporations. Corporations in Oklahoma are taxed at a 4% tax rate. 

Step 10: Submit your corporation’s first report

Unlike many other states, Oklahoma corporations are not required to file an annual report.

How much does it cost to start a corporation in Oklahoma?

Filing the Certificate of Incorporation costs a minimum of $50 and can be submitted online, by mail, or by fax. When incorporating your business, you’ll also need to consider additional costs, which can include a registered agent service, a domain name, and reserving a business name.

Given that you’ll need to complete many forms, you’ll want to make sure that everything is completed correctly. ZenBusiness can help you focus on what you’re passionate about, your business, while we handle the details. Our services can help your Oklahoma corporation stay compliant with a minimal annual fee.

What are the benefits of a corporation in Oklahoma?

Incorporating your business can have many benefits. Most notability, incorporating your business takes the legal liability off you and onto a separate entity. Once you’ve incorporated your business, Oklahoma will view it as its own legal entity owned by shareholders. 

Additional benefits include: 

• Official business: Incorporating your business can help it stand out as an official business. This will have positive ramifications in the eyes of the state and potential clients or customers. 
• Issued stock: Once a business is incorporated, it can issue stocks. Stock is ideal for startups because it can attract investors. 
• Foreign business: Having a corporation allows you to conduct business in other countries. 

While there are many benefits to incorporation, there are a few disadvantages. Most notably, the double taxation aspect of C corporations is a pretty large disadvantage. Next, the corporate structure makes management quite rigid. Lastly, having a corporation means that businesses will need to complete more bookkeeping and reporting to federal and state agencies.  

How is an Oklahoma corporation taxed?

As touched on earlier, Oklahoma has a corporate income tax (4%). Until recently, Oklahoma also had a franchise tax, but that has been phased out. Corporations are subject to federal income tax. In this next section, we’ll go over three of the basic corporate structures and their taxes. 

• C corporations: This is the default form of corporation and is double-taxed. This means that any profit the corporation makes will be taxed at the corporate level and again when it’s distributed to the shareholders. 
• S corporations: As pass-through entities, S corporations do not have to pay an income tax at the corporate level. 
• Nonprofit corporations: This type of corporate structure can apply to be exempt from state and federal income taxes. To qualify as a nonprofit corporation, businesses must provide some kind of public benefit and will need to file a lot of paperwork. 

We can help!

Navigating the incorporation process can be daunting, but you’re not alone. While we don’t currently offer start-up services for professional corporations, we can help you with our standard business incorporation service. We’ve also got a variety of other services, all here to guide you every step of the way, helping you form your Oklahoma corporation starting at just $0 plus state fees. Let us simplify the journey for you!