Are you looking to form a corporation in West Virginia, but you’re not familiar with the formation process? There are quite a few important steps you’ll need to take to create your West Virginia corporation and maintain it, so this guide will outline the rules and regulations involved with this process.
To get started, please reference our 11-step guide below or hire a professional business incorporation service.
1) Choose a Name
One of the most important aspects of the incorporation process is naming your business. There are three major elements to consider when choosing a name:
When naming a corporation in the state of West Virginia, you will need to include one of the following words or abbreviations: incorporated, corporation, limited, company, Inc., Corp., Ltd., or Co. Your corporation’s name also cannot include any words or abbreviations that indicate other business types, like the phrase “limited liability company” or the initials “LLC.” You also are not allowed to include words that refer to certain types of businesses (like “bank” or “law office”) unless your business fits those descriptions.
In addition to the legal considerations, you might want to identify your line of business or your mission in your company name. For example, you can display any closely held values in your name, like using the word “green” for environmentally friendly businesses.
A Name You’re Proud of
Keep in mind that this is your business, so you should choose a name that you’re proud of, and that you enjoy sharing with potential customers. You should also make sure it sounds good when spoken aloud, and also looks good when written down.
Check whether your preferred name is available: Visit the West Virginia Business Organization Search to check whether it is already in use. If it’s not unique enough, you may need to tweak it or come up with a new name altogether.
Reserve Your Name
The formation process can take some time so it can be a good idea to go ahead and reserve your corporation’s name. You can reserve your name with the West Virginia Secretary of State by filling out the Application for Reservation of Corporation Name. You will need to send a check or money order for $15 alongside the form to the following address: One-Stop Business Center 1615 Washington St. East Charleston, WV 25311. Once you successfully reserve your name you will have 120 days until your reservation expires.
If you’d like a closer look at how this process works, see our walkthrough guide.
2) Select a Registered Agent
West Virginia corporations must designate a person or business to receive legal notices on behalf of the company. This important point of contact is known as the registered agent. You will be required to list the registered agent’s name and address when filing the Articles of Incorporation in step three.
Who can be my Registered Agent?
A registered agent must have a physical address within the state of West Virginia where mail and legal notices can be served during regular business hours. You can hire a service to act as your Registered Agent, serve as your own registered agent, or even use an accountant or other business professional’s address – with their consent, of course.
The West Virginia Secretary of State says that,
“A limited liability company and a foreign limited liability company authorized to do business in this state may continuously maintain in this state…An agent and address of the agent for service of process on the company…An agent shall be an individual resident of this state, a domestic corporation, another limited liability company or a foreign corporation or foreign company authorized to do business in this state.”
Our Recommendation: We recommend hiring a professional service to act as your registered agent. Doing so will help eliminate junk mail and more importantly, keep your personal and/or business address off the public record.
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Hiring an online service to handle this requirement eliminates junk mail and helps keep fewer things on your plate. Choose us at ZenBusiness to keep it stress free.
3) Complete Your Articles Of Incorporation
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This is THE document that formally registers your corporation with the state of West Virginia.
You can file online, or fill out the PDF below and send it in via mail.
Use West Virginia’s Business Startup Wizard for guidance on what you need to start your business. Use the One Stop Business portal to register your business with the Secretary of State (this includes your Articles of Incorporation), the State Tax Department, and WorkForce West Virginia (for unemployment compensation).
Keep in mind that you are acting as the incorporator when you fill out and submit the Articles of Incorporation. You should sign as the incorporator before submitting the document.
4) Establish a Corporate Record
Corporations are required under West Virginia law to document and keep a permanent record of all important company decisions. Some things that are required to be kept in the corporate record include:
- Articles of incorporation and any amendments
- Bylaws and any amendments
- The last three years of minutes from shareholder meeting and any shareholders actions
- List of names, addresses, and contacts for the directors
- Most recent annual report
The official corporate record may be kept at the corporation’s principal place of business, or stored in a safe location elsewhere. You should take the opportunity to set up a secure digital or physical location for storing company records as soon as possible.
5) Designate a Board of Directors
The incorporator is responsible for selecting the initial director(s) of the corporation.
Unless initial directors were specified in the Articles of Incorporation, the incorporator should record initial director appointments in a signed document and file it to the corporate record. This document is known as the “incorporator’s statement.” A sample incorporators statement can be found here.
The initial directors (3 minimum initial directors are required) will serve until new directors are elected at an annual shareholder meeting, or as otherwise indicated in the bylaws. The incorporator may serve as an initial director.
6) Create Corporate Bylaws
Corporate bylaws set out the rules and procedures for how the corporation will operate. Some important topics typically covered in the bylaws include:
- How shareholders will conduct votes
- The total number of directors and how each director will be elected
- How often the board of directors will meet
- The types of officer roles that will be appointed
- Procedures for resolving internal disputes
Bylaws are not legally required in West Virginia, but they are strongly recommended.
Bylaws help your business run smoothly, and are sometimes required by financial institutions for opening business bank accounts or acquiring loans.
Either the incorporator or the initial directors may prepare the company bylaws. The bylaws should be recorded in an internal company document, signed by the incorporator or a director, and filed to the corporate record. The bylaws are not filed with the state of West Virginia.
If you’d like a solid framework for creating corporate bylaws, there are plenty of services and free templates available online.
7) Hold First Board Meeting
After designating a board of directors and preparing bylaws, every corporation is legally required to call for an initial board meeting and to have an annual board meeting going forward. The incorporator often arranges and attends this first meeting. During the first board meeting, the initial directors should plan to cover the following topics:
- Review and approve corporate bylaws
- Designate officers to manage day-to-day business affairs
- Choose a bank
- Approve issuance of stock certificates
- Determine whether the company should elect to be taxed as a C corporation or S corporation (see step Nine for more details)
Recording Meeting Minutes: a detailed record of all key discussions and decisions during the board meeting should be prepared and distributed to all board members for their review and approval. This record is known as the “minutes”. A copy of the minutes should be sent to each director for review and filed in the company record.
8) Handle Tax Obligations
You’ll need a federal tax ID number (EIN) to operate a corporation in West Virginia. You can obtain your EIN from the IRS for free, and it’s a fairly painless and simple process. An EIN is required for your corporation to hire employees, file corporate taxes, open business bank accounts, and more.
A major decision for any corporation is determining whether to be taxed as a C corporation or an S corporation. Take a look at how these two formats differ:
- C Corp: The majority of corporations are C corporations, as they are subject to far fewer restrictions than S corps. With a C corp, profits are taxed at the corporate level, and again on the personal tax returns of the shareholders, resulting in what’s commonly referred to as double taxation.
- S Corp: This is only an option if your corporation has fewer than 100 shareholders, only issues one class of stock, is not owned by another business entity, and does not have any foreign shareholders. If your corporation meets these requirements, you can select the S corp’s pass-through taxation which eliminates the double taxation issue of C corps. S corp dividends are not taxable.
Businesses in West Virginia must pay a corporate income tax. Additionally, certain taxes (such as various excise taxes: alcohol, soft drinks, tobacco, fuel, etc.) may apply to your business, depending on the work you do and the services you provide. You will determine state tax requirements during your business registration using the One Stop Business portal mentioned in step four. For more information, visit the Business page on the West Virginia State Tax Department website.
Completing your business registration using the One Stop Business portal is crucial to fulfilling all your state requirements. According to the West Virginia State Tax Department, “businesses must obtain a business registration certificate from the State Tax Department before engaging in any business activity in the state. Operating a business without a certificate is a serious offense and can be subject to a fine of $100.00 per day for each day a business operates without properly registering”.
If, for whatever reason, you choose not to or are unable to complete your business registration using the One Stop Business portal, make sure to register with each required state agency (the Secretary of State, the State Tax Department, and WorkForce West Virginia).
Contact your city and county governments to determine local taxation requirements. This is an important step to ensure that you won’t miss anything you are required to do. Here are business resources for the five largest cities in West Virginia (these sites will also come in handy in steps ten and eleven):
9) Obtain Business Licenses and Permits
West Virginia does not have a general business license for all industries; instead, there are industry-specific permits and licenses that you may need to acquire. Reference our guide for any required permits or licenses. It includes general permit requirements, business specific permits, permits listed by business, and a listing of state agencies administering professional licenses.
Depending on your trade, you will need certain licenses and permits through the West Virginia Division of Labor: you can find a list of them here. This resource also includes links to local contact information, which you will need in order to determine local licensing requirements. The five major cities mentioned above in step nine also offer licensing and permitting services on their websites.
10) Acquire Insurance
If you have employees, you are required by law to pay both unemployment insurance (referred to as unemployment compensation in West Virginia), and provide workers’ compensation (learn more about workers’ compensation on the Employer Coverage page of the West Virginia Offices of the Insurance Commissioner website). As mentioned in step four, unemployment compensation is taken care of using the One Stop Business portal. The WorkForce West Virginia website offers services such as filing reports and making payments, and they provide an informational Employer Handbook.
In addition, you should also pursue general liability insurance and other more industry-specific types of insurance, but these are not legally required.
11) Open a Business Bank Account
To operate a corporation and receive the limited liability protection that comes with it, you have to keep your personal assets entirely separate from your business assets. Due to this requirement, it’s strongly advised that you acquire a business bank account for your corporation.
Failure to successfully keep your personal and business affairs separate could result in a court piercing the corporate veil and you being personally responsible for your corporation’s liabilities. If you need help finding the best business bank account check out our recommendations.
Get Help Forming a Corporation
The process of incorporating in any state can be a lengthy one. If you run into any trouble along the way, remember that there are plenty of organizations that can help you navigate the incorporation process.
Online Incorporation Services
If you would like to hire an affordable business incorporation service to create your corporation for you, services like ZenBusiness and Incfile can help you out. These service providers can handle most of the formation process, while still charging much lower rates than a business attorney’s fees.
There isn’t the same level of personalization that a lawyer can provide, but incorporation services can still be a tremendous help. The only major issue with these service providers is the fact that they can’t provide any actual legal advice, so you need to know what you want ahead of time.
West Virginia Business Attorney
There are some situations where hiring a business lawyer is a preferable route to using an online incorporation service. The corporation as a business structure can be highly complicated, and if you want to have the peace of mind that every single step was taken care of by a true expert, hiring a business attorney to form your West Virginia corporation is the way to go.
If you would like to pursue this route, there are some convenient services that can help you choose the right lawyer for your business. We like to use Avvo’s directory of West Virginia attorneys, which has extensive reviews and ratings for hundreds of West Virginia business lawyers, which can make it much easier to select an attorney who has your best interests in mind, and also has the expertise to get the job done right.