> ## Documentation Index
> Fetch the complete documentation index at: https://docs.pluvel.com/llms.txt
> Use this file to discover all available pages before exploring further.
# Corporation Formation
> Form a C-Corporation through Pluvel.
You're building something bigger. Maybe you want to raise venture capital. Maybe you're planning for an IPO someday. Maybe you just want the structure that 67% of Fortune 500 companies use.
A corporation is a separate legal entity — it can own property, sign contracts, sue and be sued, all independently from you. It's more complex than an LLC, but it's built for scale.
## Why people incorporate
**Unlimited growth potential.** Issue stock to investors, employees, and advisors. Multiple classes of stock with different rights. Go public if you want.
**Investors expect it.** VCs and institutional investors want C-Corps. Their lawyers know how Delaware corporations work. Their deal structures assume stock, not membership interests.
**Perpetual existence.** The corporation lives on even if founders leave, sell their shares, or pass away.
**Centuries of case law.** Especially in Delaware, there's a predictable legal framework. Courts have ruled on almost every scenario you can imagine.
## The double taxation reality
Corporations pay tax at the entity level (21% federal rate). When shareholders take dividends, they pay tax again.
But here's the thing: if you're reinvesting profits into growth rather than distributing them, double taxation barely matters. Most startups don't pay dividends for years. By the time they do, the structure has already paid for itself in investor access and growth.
If you want pass-through taxation, you can elect S-Corp status after forming. But S-Corps have limits: 100 shareholders max, one class of stock, US owners only. Most VC-backed companies can't use it.
## What Pluvel handles
| Task | What we do |
| ------------------------- | ------------------------------------- |
| Name availability | Check if your name is available |
| Articles of Incorporation | File with the Secretary of State |
| Registered agent | Provide a registered agent (included) |
| EIN application | Apply for your federal tax ID |
| Bylaws | Generate standard corporate bylaws |
| Initial resolutions | Board resolutions for first directors |
| Stock certificates | Templates for issuing shares |
## Why Delaware
About 67% of Fortune 500 companies are incorporated in Delaware. Here's why:
**Court of Chancery.** Specialized business court with judges (not juries) who understand corporate law. Disputes get resolved by experts.
**Flexible corporate law.** Delaware General Corporation Law is business-friendly and frequently updated. You can do things in Delaware you can't do elsewhere.
**Established precedent.** Decades of case law means fewer surprises. Lawyers know what to expect.
**Privacy.** Directors and officers don't appear in public filings.
If you're raising venture capital, incorporate in Delaware. Investors expect it, and their lawyers are comfortable with it. Saves everyone time and legal fees.
## Formation requirements
Must include "Corporation," "Incorporated," "Company," or abbreviations (Corp., Inc., Co.). We check availability.
How many shares can your corporation issue? Common startup setup: 10,000,000 shares of common stock. You don't have to issue them all — this is just your ceiling.
The minimum price per share for accounting purposes. Delaware standard: \$0.0001 per share. This minimizes franchise tax.
The person who signs the Articles of Incorporation. Pluvel can act as incorporator.
Who will serve on the board? Can be one person for a small company.
## After incorporation
Once your corporation is approved:
1. **Hold organizational meeting** — Adopt bylaws, elect officers, authorize stock
2. **Issue founder shares** — Document who owns what percentage
3. **83(b) election** — If shares vest over time, file within 30 days to avoid a tax nightmare
4. **Open bank account** — Use your Articles and EIN letter
5. **Set up equity tracking** — You'll need this as you issue more shares
## Corporate roles
| Role | What they do |
| ------------------------- | ------------------------------------------------------ |
| Shareholders | Own the company. Vote on major decisions. |
| Board of Directors | Oversee management. Make strategic decisions. |
| Officers (CEO, CFO, etc.) | Run day-to-day operations. Appointed by the board. |
| Registered Agent | Receives legal documents on behalf of the corporation. |
You must hold at least one board meeting per year and document it with minutes. Annual shareholder meetings are also required in most states. Skip these formalities and you risk losing liability protection.
## State-specific considerations
Most popular for startups. Franchise tax is based on authorized shares or assumed par value — always calculate both methods and use whichever is cheaper. Minimum $175/year, capped at $200,000.
\$800 minimum franchise tax per year. Required if you're "doing business" in California, even if incorporated in Delaware. If your customers, employees, or office are in California, you're probably doing business there.
No state corporate income tax. No franchise tax. Popular for businesses that want tax advantages but don't need Delaware's legal framework for investors.
No state income tax. Low fees. Good for privacy. Growing in popularity for small corporations not seeking venture capital.
## Corporation vs. LLC
| Feature | Corporation | LLC |
| --------------------- | ------------------------- | ------------------------------ |
| Stock issuance | ✓ | Limited (membership interests) |
| Investor expectations | Preferred | Sometimes acceptable |
| Going public | ✓ | Must convert first |
| Ongoing formalities | More | Less |
| Tax flexibility | Less (without S election) | More |
| Self-employment tax | Wages only | All profits |
## Common vs. preferred stock
| Type | Who gets it | Features |
| --------------- | ------------------- | ----------------------------------------------------- |
| Common stock | Founders, employees | Voting rights, last in liquidation |
| Preferred stock | Investors | Liquidation preference, anti-dilution, special rights |
When you raise venture capital, investors typically get preferred stock with protections common shareholders don't have. That's normal — don't be surprised by it.
Step-by-step guide to incorporating with Pluvel.