Congratulations on deciding to start a corporation in West Virginia! Forming a corporation can be exhilarating, but it can also be challenging. Whether you’re a seasoned business owner or a beginner, we’ll shed some light on forming a corporation in West Virginia so that you can start growing your new business.
We’ll walk you through all of the steps you need to follow to keep your corporation compliant with West Virginia laws and offer helpful tips along the way.
How do I form a Corporation in West Virginia?
Steps to form your West Virginia Corporation
- Name Your Corporation
- Appoint Directors
- Choose an West Virginia Registered Agent
- File the West Virginia Articles of Incorporation
- Create Corporate Bylaws
- Draft a Shareholder Agreement
- Issue Shares of Stock
- Apply for Necessary West Virginia Business Permits or Licenses
- File for an EIN and Review Tax Requirements
- Submit your Corporation’s first report
To officially begin operating as a corporation in West Virginia, you’ll need to file your Articles of Incorporation with the state. But, before you jump the gun, we’ll walk you through the upfront work you’ll need to complete. In this guide, we’ll help you navigate through the below 10 steps:
Step 1: Name Your West Virginia Corporation
The first step in the process is naming your West Virginia corporation. Choosing a business name can be fun, but you’ll want to make sure your new name is fitting for the service or products you offer. To abide by state law, you’ll want to avoid using any words in your name that could be offensive or derogatory. It’s a good idea to compile a list of possible names.
Once you have your list, you’re ready to run your options through the West Virginia Secretary of State’s Business Organization Search. You’ll want to make sure the name you choose is not registered to another company.
When you find a unique name you like, you’ll need to decide on an official corporation designator to add to the suffix. In West Virginia, you can choose from any of the below approved designations for your corporate name:
- Corporation (Corp.)
- Incorporated (Inc.)
- Company (Co.)
- Limited (Ltd.)
- Foundation (only for nonprofit corporations)
If your corporation name is “Maxwell’s Restaurants,” your official name might be “Maxwell’s Restaurants Co.” or “Maxwell’s Restaurants, Incorporated.”
When you’ve chosen a designator, you may want to reserve your corporation name so that no other business secures it. You’ll fill out the Application for Name Reservation and submit it by email (CorpFilings@wvsos.gov), fax, or deliver in person. There is a $15 filing fee, and your name is reserved for 120 days.
You can deliver your form to the Charleston Office, the Clarksburg Office, or the Martinsburg Office. Specific addresses are located on the form.
We recommend making a few additional decisions about your company name before moving on to Step 2.
Whether or not you plan on trademarking your corporation name, you should at least check as to whether or not your name is infringing on someone else’s trademark. At the state level, you can visit the West Virginia Secretary of State website to see if a trademark exists. You can also search on the federal level by visiting the United States Patent and Trademark Office’s (USPTO) website.
If your company will do business or sell products under a separate name, you’ll need to secure a trade name, otherwise known as a “doing business as” (DBA) name. You can fill out the trade name application online. There is a $25 filing fee.
Step 2: Appoint Directors
Next, it’s time to appoint a board of directors to your company. In West Virginia, all corporations must appoint at least one director to their board. Your corporation’s directors serve your company’s best interests, acting on your corporation’s behalf. A corporation’s board of directors will also adhere to and uphold company bylaws.
You’ll also want to choose an incorporator for your corporation. This is the person who fills out and signs your Articles of Incorporation in step four.
Step 3: Choose an West Virginia Registered Agent
Every corporation in West Virginia must appoint a registered agent to their company. A registered agent will receive important government communications, such as tax paperwork, lawsuit notices, and other official correspondence on your corporation’s behalf.
In West Virginia, a registered agent must be over 18 and hold a residence within the state. Alternatively, your registered agent can be a domestic or foreign corporation with a registered office located in the state. Lastly, your agent must be available between normal working hours during the weekday to receive government communications.
Some corporations choose to appoint someone within their company to serve as their registered agent. While this is legal, it’s not always a smart idea. There are several downsides to acting as your company’s registered agent. A few include:
- Disclosing private information. When you become a registered agent, you agree to have some of your personal information be made public record.
Legal interruptions. Since registered agents receive sensitive legal documents like subpoenas or summons, when you act as your own agent, these papers will be served at your office, where you could be meeting with new partners or clients.
Step 4: File the West Virginia Articles of Incorporation
It’s finally time to register your West Virginia corporation with the Secretary of State. You’ll do this by completing your Articles of Incorporation. This document must be filed before your company can officially conduct business.
In West Virginia, you can file your Articles of Incorporation online (you’ll need to create an account with the One Stop Business Portal First), by email (CorpFilings@wvsos.gov), by fax, or by delivering them in person. To file this form, you’ll need the below information handy:
- Your official corporation name
- Your company address
- Your registered agent’s name and address
- A business email address
- A business website address (if one exists)
- Details on any other existing businesses
- Nonprofit or for-profit designation
- Share information (number of shares, the price per share)
- Your corporation’s business purpose
- Your company’s incorporators (at least one)
- Acres of land that your company holds or expects to hold
- Signature of incorporator
You’ll need to pay the $100 filing fee if you’re a for-profit corporation and only $25 if you’re a nonprofit corporation. The filing fee is waived for veteran-owned and Young Entrepreneur corporations. If delivering your form, bring payment and the document to the Charleston Office, the Clarksburg Office, or the Martinsburg Office. Specific addresses are located on the form.
Step 5: Create Corporate Bylaws
Now you’re ready to establish your corporate bylaws. Your company’s corporate bylaws are important in dictating how your company will be managed and run. Although they are not required to be turned in to the West Virginia government, everyone in your company should understand them and have access to a copy.
Your company bylaws may include your basic operating procedure, management structure, rules and regulations, shareholder information, board voting rules, and share information.
Step 6: Draft a Shareholder Agreement
Once your bylaws are established, you can draw up a shareholder agreement. A shareholder agreement details the relationship between the shareholders and the corporation. This document should follow the general principles and operational procedures outlined in your bylaws. It should contain more detail around shareholder roles, voting procedures, and stock shares.
A shareholder agreement exists largely to outline the obligations and safeguard the rights of the shareholders. Every shareholder should read and sign this agreement.
Step 7: Issue Shares of Stock
Once your agreements are in place, you can begin issuing shares of stock. This step is required for all West Virginia corporations. Since you noted your number of shares on your Articles of Incorporation (and price per share), you’ll want to make sure you adhere to those same amounts.
You can choose to sell your shares privately or publicly. When you sell privately, your shares are dispersed among a relatively small group, such as the founders, directors, and employees of your corporation and/or a group of private investors. When you sell publicly, your shares will be available in the marketplace where anyone can purchase them.
Keep in mind that if you decide to sell shares on the public market, you’ll be required to file quarterly stock forms with the U.S. Securities and Exchange Commission (SEC) to remain compliant with West Virginia and federal laws. You will also have to register with the West Virginia Securities Commission.
Step 8: Apply for Necessary Business Permits or Licenses
Depending on your industry or area of service, you may need to apply for industry-specific licensing or permits. You can view the specifications for state licensing on the West Virginia Division of Labor website. You can also learn if your corporation needs to obtain special state licensing here.
Licensing can be federal, state, local, or industry-specific, so do a thorough search to make sure your business has everything it needs. In particular, reach out to your county and city governments about any local licenses and permits.
Step 9: File for an EIN and Review Tax Requirements
You can officially register your West Virginia corporation with the Internal Revenue Service (IRS) to pay taxes. Corporations will do this by requesting an Employer Identification Number (EIN), which serves as your company’s version of a Social Security number.
With your EIN, you can open corporate financial accounts, hire workers, and pay your taxes.
You can register for your EIN online through the IRS. The process is quick and free.
If your corporation is a C corporation, it will need to pay West Virginia corporate income tax as well as federal income tax. When you get the business registration certificate described in the previous step, you will also have registered with the West Virginia State Tax Department.
Next, you’ll want to check other tax requirements. If you are paying employees, you’ll want to establish a wage withholding account through the West Virginia State Tax Department. This will pull federal and state taxes from your employees’ payroll checks to ensure your corporation remains tax-compliant.
If you collect any form of sales tax, you’ll need to set up a municipal sales and use tax account through the state.
Step 10: Submit Your Corporation’s First Report
The final step in forming your corporation in West Virginia is filing your first annual report. This report is due every year and must be turned in to ensure your corporation remains compliant.
How much does it cost to start a corporation in West Virginia?
The exact cost you’ll spend starting your West Virginia corporation will vary depending on whether you’ve worked with tax specialists or consultants along the way. Typically, you should expect to pay a minimum of $100 to file your Articles of Incorporation.
Of course, you’ll spend more if you reserve your name or register a trade name. This $100 baseline cost also doesn’t include securing required business licenses or filing your annual report.
If you want help filing your administrative forms, reach out to a professional like ZenBusiness.
What are the benefits of a corporation in West Virginia?
There are different business entities to consider when forming a business. In West Virginia, many business owners choose to start a corporation because of the protections and benefits this business type can offer.
A few benefits include:
- The separation between the company and individual finances. When you form a corporation, your personal finances are protected if your company runs into financial problems.
- Protection from legal liability. If you decide to start a corporation, you will not be held personally liable for lawsuits directed at the company.
- Access to a global market. When you incorporate, you are allowed to offer your products and services around the world.
- More respectability. Clients, partners, and investors tend to take companies more seriously after discovering they’re incorporated.
A few drawbacks include:
- Taxation regulations. Unfortunately, corporations are subject to what is known as double taxation. This means shareholders will pay taxes on profits twice, once at the corporate level and again at the individual level.
Stricter rules and regulations. Corporations have to adhere to stricter reporting regulations than other companies. This business entity also has less freedom when structuring the company — for example, corporations are required to appoint directors, an incorporator, and to issue stocks.
How is an West Virginia corporation taxed?
Taxes work differently depending on what type of West Virginia corporation you form. There are three main types: C corporations, S corporations, and nonprofit corporations. By default, your company will be registered as a C corporation unless you choose a different type.
C corporations are separate legal and taxable entities from their owners (shareholders). This designation requires them to pay corporate taxes on profits. In addition, shareholders must pay individual taxes on earnings.
S corporations are seen as pass-through business entities. This designation allows the profits to essentially pass through to the shareholders and owners, who would then pay taxes on their profits on personal tax returns. S corporations do not pay corporate taxes.
Nonprofit corporations can apply with the IRS to be exempt from paying federal taxes, as long as they adhere to federal nonprofit guidelines. If a nonprofit successfully applies to be federally tax exempt, they are also exempt from paying state income taxes in West Virginia and sometimes sales and use taxes (more details are here).
West Virginia Corporation FAQs
- Does running a corporation in West Virginia involve more paperwork than running other types of businesses?
Yes. In West Virginia, corporations typically have more paperwork requirements than other business types. Some of these requirements include filing quarterly stock reports and annual corporation reports.
- What is the difference between an LLC and a corporation in West Virginia?
The main difference between a limited liability company (LLC) and a corporation in West Virginia is how they are run and taxed. Typically, LLCs are allowed more freedom in structuring and managing their company than corporations. LLCs are also excluded from paying corporate taxes, eliminating double taxation. Do you want to find out more about the distinctions between LLCs and corporations? Review this information.
- How do I change my corporation’s name in West Virginia?
How do I change my corporation’s name in West Virginia?
- How many people are needed to form a corporation in West Virginia?
A single person can form a corporation in West Virginia.
- Can I form my West Virginia corporation online?
Yes. You can file online using the West Virginia One Stop Business Portal.
- How do I dissolve my West Virginia corporation?
To dissolve your corporation, you will need to file a Certificate of Dissolution and pay a $25 filing fee (with $1 added if filing online).
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