Close corporation
A corporation with few stockholders (in Delaware, no more than 30) that elects close-corporation status. Stockholders may manage it directly by agreement, without a board.
- Entiva fee to form
- $199
- Government fees to form
- $109
- Run plan
- $39 a month
- Steps to form
- 12
- Ongoing filings
- 12
- Ways to close
- 3
Who it suits, and what defines it.
The facts that decide whether it fits.
Who it suits
- Companies with a small, fixed group of stockholders.
- Owners who want to run the company directly, without a board.
Key facts
- Stockholders
- Few; in Delaware no more than 30
- Management
- Stockholders may manage directly, without a board
- Share transfers
- Restricted by the charter
- Public offerings
- Banned
- Available in
- DE, NV, WY; other states vary
- Delaware law
- 8 Del. C. §§341-356 (Subchapter XIV)
- Other law
- NV NRS ch. 78A; WY W.S. 17-17 supplement
- Annual filings
- Franchise tax and report as for a corporation
What the law requires.
3 rules, each in plain words.
A charter that elects close-corporation status
It must also restrict share transfers and ban public offerings.
The same annual franchise tax and report as a corporation
No more than 30 stockholders in Delaware
How Entiva forms it.
12 steps. Entiva prepares and files each one, and collects every signature the law needs.
The steps
12 steps- 1Reserve the company nameOnly if needed
Optional.
- 2File the certificate or articles of incorporation
The certificate states the close-corporation election, the share transfer restrictions and the ban on public offerings.
- 3Appoint a registered agent
The registered agent receives legal papers served on the company. Required at filing; in Delaware it needs a physical office.
- 4Sign the incorporator's consent
The incorporator signs the certificate. This step adopts the bylaws and elects the first directors if the certificate does not name them. Nothing is filed.
- 5Adopt the bylaws
The bylaws are an internal document and are not filed.
- 6Sign the first board consent
Every director signs personally. Skipped if the stockholders agree to manage the company directly.
- 7Appoint the officers
Delaware has no filing for officers. They appear on the next annual report.
- 8Issue shares to the founders
Founders give money or other value for their shares, which are recorded in the stock ledger. Nothing is filed with the state.
- 9Open the stock ledger
Entiva keeps the record of who holds the shares (the stock ledger). It is never filed with a state.
- 10Obtain the EIN (US tax number)
Online if the responsible party (named on the form) has a Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
- 11Register for state and local taxes
Covers state tax, payroll and sales tax registrations where you do business.
- 12Obtain the Nevada state business licenceOnly if needed
Only for Nevada. The licence normally comes with the initial list at formation.
Documents
8- Certificate or articles of incorporation
- Registered agent consent or certificate of acceptance
- Consent to act from each named director and officer
- Nevada initial list of officers and directors
- Stamped filed certificate from the state
- Bylaws
- Unanimous written consent of the board of directors
- Restricted stock purchase agreement for founder shares
Who takes part
6- The contact named to the registered agent verifies with photo ID and a liveness check
- An incorporator verifies identity, only if an individual signs instead of Entiva
- Every director verifies with photo ID, a liveness check and proof of address
- Every senior officer verifies with photo ID, a liveness check and proof of address
- The secretary, who records minutes, verifies with ID and a liveness check
- Every 25% owner verifies, plus at least one person with substantial control
What has to be filed, and when.
Entiva tracks every deadline from the day it is formed, and files before each one.
Every year, and as things happen
12 filings- File the Delaware franchise tax report
March 1 each year
- Pay the Delaware franchise tax
March 1 each year
- Pay Delaware estimated tax in instalments
June 1, September 1 and December 1, if the tax is $5,000 or more
- File the Wyoming annual report
First day of the anniversary month
- File the Nevada annual list
Last day of the anniversary month
- Hold the annual meeting unless waived by agreement
Each year, as the bylaws set
- File the federal tax return
15th day of the 4th month after year end (April 15 for a calendar year)
- Extend the filing deadline (optional)
On or before the original due date
- File the FBAR (report of foreign bank accounts)
April 15, with an automatic extension to October 15, if you hold foreign accounts
- File Forms 1099 for contractor payments
January 31 each year for Form 1099-NEC, to the IRS and to recipients
- File Forms 1042 and 1042-S for payments to foreign persons
March 15 each year, if you make such payments
- File the Delaware unclaimed property report
March 1 each year, for most companies
The changes Entiva handles.
Each change is prepared, approved, signed and filed.
The most common changes
10 changes- Appoint a director, if there is a board
- Appoint an officer
- Record a decision of the stockholders
- Issue new shares
- Record a share transfer
- Amend the bylaws
- Change the company name
- Change the registered agent
- Declare a dividend
- Order a certificate of good standing
How it closes.
3 routes. The right one depends on whether it can pay its debts, and who starts it.
Voluntary dissolution
The stockholders decide to close.
- 1
The stockholders approve in writing
- 2
File the final franchise tax report
- 3
Pay the franchise tax
- 4
File the certificate of dissolution
- 5
Notify the IRS on Form 966 within 30 days of the plan
- 6
File the final payroll returns
- 7
File the final federal tax return
- 8
Resign the registered agent
- 9
Deactivate the EIN
Revoke a dissolution
The stockholders change their mind.
- 1
File a certificate of revocation of dissolution (Delaware)
Voidance, then revival
The franchise tax is unpaid.
- 1
The state voids the charter
- 2
Revive the corporation and pay back taxes and penalties
What Entiva does for you.
From the first filing to the last.
Close corporation
- Files the certificate of incorporation with the close-corporation election.Formation
- Appoints the registered agent and records your communications contact.Ongoing
- Prepares the incorporator's consent and the bylaws for signing.Formation
- Issues founder stock and records it in the stock ledger.Formation
- Obtains the EIN from the IRS once the responsible party has signed.Formation
- Prepares the Delaware franchise tax report, files it after an officer approves and pays the tax at cost.Ongoing
Build it with the API.
Every step on this page is an action in the Entiva API, with its documents, signatures and filing.
What it costs, item by item.
Every Entiva fee and every government fee, from forming it to closing it.
Forming it
$199one-off
- Government fees
- $109
Steps marked only if needed are not counted.
Closing it
From $299
- Entiva fee
- Fixed, quoted first
- Government fees
- At cost
Included in the Run plan
- File the Delaware franchise tax report
- Hold the annual meeting unless waived by agreement
- File the federal tax return
- Extend the filing deadline (optional)
- File Forms 1099 for contractor payments
- Routine changes
- Every deadline tracked
Extra, at a fixed fee
- Register for state and local taxes
- Obtain the Nevada state business licenceOnly if needed
- File the FBAR (report of foreign bank accounts)
Each extra is quoted before it starts, and nothing is done until you approve it.
Forming it
Entiva's formation fee is $199, one-off. Government fees are passed through at cost.
Delaware $75 for a 120-day reservation.
DE expedite: 24-hour $50, same-day $100, 2-hour $500, 1-hour $1,000. WY $100.
$500 for corporations under NRS 78, 78A, 78B and foreign corporations; $200 for other entities. Initial list fee of $150 is charged separately.
Excludes steps marked only if needed.
Every year
The Run plan costs $39 a month ($468 a year).
$50 filing fee for non-exempt corporations, $25 for exempt. Late: $200 penalty plus 1.5% interest per month; charter void after 1 year unpaid or unfiled.
Authorised Shares Method: $175 up to 5,000 shares, $250 for 5,001-10,000, plus $85 per extra 10,000 shares or portion. Maximum $200,000; Large Corporate Filers fixed $250,000. Non-stock for-profit non-exempt: flat $175.
Greater of $60 or $0.0002 per dollar of WY assets. Nonprofits and cooperative marketing associations $25; statutory foundations $100; statutory trusts $100 annual tax. Over $500 must be filed by mail or courier.
Corporation minimum $150 list plus $500 licence, $650 in total. LLC $150 plus $200, $350 in total. Nonprofit list $50.
Changes
Routine changes are included in the Run plan.
Delaware: corporation $214; LLC $220; LP $200; statutory trust $500; foreign corporation name-change amendment $100. Wyoming $60. Nevada $175.
Delaware: $50 for corporations, LLCs, LPs and partnerships; expedite 24-hour $100, same-day $200. Wyoming $5. Nevada $60.
Delaware short form $50; long form $175. Wyoming free online, $20 on paper. Nevada $50.
Closing it
Closing is a fixed-fee project, quoted before it starts.
$50 filing fee for non-exempt corporations, $25 for exempt. Late: $200 penalty plus 1.5% interest per month; charter void after 1 year unpaid or unfiled.
Authorised Shares Method: $175 up to 5,000 shares, $250 for 5,001-10,000, plus $85 per extra 10,000 shares or portion. Maximum $200,000; Large Corporate Filers fixed $250,000. Non-stock for-profit non-exempt: flat $175.
NV $100, NV nonprofit $50. WY $60, nonprofit $25.
Delaware $189 plus taxes.
Delaware corporation revival $189 plus all back taxes, penalties and interest; LLC revival $220; LP $200; LLP/LLLP reinstatement $200; foreign corporation reinstatement $125.
Entiva fees are in US dollars. Government fees are in the currency each authority charges, passed through at cost when the filing is made. Taxes are separate.
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