How to Form a S Corporation in West Virginia

In West Virginia, you may incorporate a S corporation (S corp) by founding a limited liability company (LLC) or a corporation and then choosing S corp status from the IRS when you file for your EIN.

An S corporation is a tax categorization, not a company structure, according to the IRS. The S corp classification is used to lower a company’s tax burden.

In our How to Start a S Corp in West Virginia tutorial, we’ll walk you through the steps.

Considerations Before Forming a S Corp

You must examine the following things before founding a S corporation:

Is a S corporation the best option for your company?
S corporation limitations
Why is an LLC the ideal structure for the S corporation tax status?
Are the tax benefits of a S corporation good for you?

Is a S Corporation the Best Business Structure for You?

Restrictions on S Corporations

S corporations are restricted to one class of stock and 100 stockholders, among other things. For more information, see our What Is a S Corporation? guide.

Why is an LLC the best structure for S Corporation tax status?

As entrepreneurs, we feel that incorporating a S corporation via an LLC is the best option since the benefits of founding a corporation are offset by S corp limitations. LLCs are also less difficult to manage than corporations.

Are S Corporation Tax Benefits Right for You?

You must determine if the S corp tax status is preferable to the default LLC tax status for your company. Read our LLC vs. S corp tutorial to fully grasp the tax benefits of a S corp.

How to Form a S Corporation

There are two major methods to form a S corporation:

When requesting your employee identification number, organize an LLC and obtain S corp tax status from the IRS (EIN)
By creating a company and applying to the IRS for S corp status

We do not advocate forming a company with the S corp tax status since it undermines all of the advantages of forming a corporation.

Forming an LLC and Choosing S Corp Status in West Virginia

To form an LLC and elect S corp status, follow these five simple steps:

Step 1: Give Your LLC a Name

Step 2: Select a Registered Agent.

Step 3: Submit the Articles of Incorporation.

Create an Operating Agreement in Step 4

Step 5: Obtain an EIN and submit Form 2553 to elect S Corporation tax status.

Step 1: Give Your LLC a Name

The first and most significant step in forming an LLC in West Virginia is deciding on a name.

Make sure your name conforms with West Virginia naming regulations and is readily searched by prospective customers.

1. Follow the West Virginia LLC name guidelines:

Your firm’s name must contain the words “limited liability company” or “limited company” or one of its acronyms (LLC, L.L.C., LC, or L.C.). “Limited” may be shortened to “Ltd.” while “business” can be shortened to “Co.”
Your name must not include the words incorporated, corporation, company, limited, inc., corp., co., or ltd.
Your name cannot include any term or phrase that indicates the LLC was formed for a reason other than the one mentioned in its articles of incorporation.
If the company activity does not contain “banking” or “insurance,” the words “banking” and/or “insurance” cannot be used in the business name.
The terms “engineer” and “engineering” may be used only if the objective is to conduct professional engineering and one of the principals is a licensed West Virginia professional engineer.
Other licensed professions have their own set of rules and limitations.
“911” cannot be part of your name.
Your LLC’s name cannot include terms that may be confused with a government organization (FBI, Treasury, State Department, etc.).
Your name must be distinct from any other current company in the state. This covers reserved names in West Virginia.

2. Does the name exist in West Virginia? Do a business organization search on the West Virginia Secretary of State website to ensure the name you choose is accessible.

3. Is the URL accessible?

We suggest that you check to see whether your company’s name is accessible as a web domain. Even if you don’t intend to construct a company website right away, you may want to purchase the URL to prevent others from gaining it.

Step 2: Select a Registered Agent in West Virginia

For your West Virginia LLC, you must appoint an agent for service of process, often known as a registered agent.

A registered agent for your LLC will accept legal papers and tax notifications on your behalf. When you submit your LLC’s Articles of Organization, you will name your registered agent.

Many company owners opt to use the services of a registered agent. Many of these firms will incorporate your LLC for a modest price and provide free registered agent services for the first year.

Step 3: Submit the Articles of Organization for the West Virginia LLC.

To properly register an LLC, the West Virginia Articles of Organization are utilized.

Step 4: Draft an Operating Agreement for your LLC.

An LLC operating agreement is a legal document that defines your LLC’s ownership and member responsibilities.

Step 5: Apply for an EIN and fill out Form 2553 on the IRS website.

An EIN is a number assigned by the US Internal Revenue Service (IRS) to companies in order to identify and tax them. It is basically a business’s Social Security number.

When you apply directly with the IRS, EINs are free.

Select S Corporation Tax Status
The IRS will give a link to Form 2553, the Election by a Small Business form, during the online EIN application process.