|
|
Incorporate your business online: Feature Article
What is a corporation?
A corporation is a type of business that is considered to be a legal entity that is separate from its owners, basically what this means is that the owners are not responsible for the corporations debts, including taxes. Corporations can also have an unlimited number of shareholders, but this is only true for C corporations, S corporations have their own rules.
One of the best things about corporations is that the corporation actually limits the personal liability of the owners for claims against the corporation. Most of the time the owners of the corporation are not going to be personally responsible for any of the claims or debts against the corporation, the only time they are going to be responsible is if the owners have signed a personal guarantee for some kind of credit approval. But another advantage to the corporation is that since it is a separate legal entity that also means that it has an unlimited life, which means that it can last longer than its owners.
|
|
But the biggest disadvantage to the corporation is the double taxation that can occur, basically this is where the profits that the corporation makes are taxed for the corporation and then the dividends that the corporation pays out are taxed for the individuals. The reason that this happens is that the corporation must file a separate tax return from its owners because they are a legal entity and then the owners also have to file a personal income tax return to pay their own taxes. So the profits that are made by the corporation are taxed twice.
Helpful Resources: 1. Incorporate: Incorporate online, Incorporate your business online This website gives you useful information that you will need in order to incorporate your business and will also allow you to incorporate your business online through which ever state you choose. 2. Incorporating and LLC Formation - Business Incorporation Service 3. Incorporate your business, incorporation, incorporating a business 5. Incorporate Online 6. Incorporate a Business or Form a Corporation Today 8. Incorporate online. Incorporate with Parcorp Services 9. How to Incorporate Your Business and the Reasons Why You Should 10. Incorporating online business incorporating |
What is an S corporation?
This is pretty much the same thing as a regular or C corporation, but with one main difference. The biggest difference between a C and an S corporation is that the S corporation has elected a special tax status with the IRS. Basically what this special status is a tax treatment which allows the income of the corporation to be treated like the income of a partnership or sole proprietorship. In this case what happens is that the income is actually passed through to the shareholders and this allows them to deduct any business losses up to the amount that they have invested or claim any profits that the business has made. This actually gets rid of the double taxation that corporations face.
But something that you want to keep in mind when it comes to S corporations is that in order to qualify for an S corporation status the corporation must be a United States corporation. But the corporation must also only have one class of stock and it must have fewer than 75 shareholders. When it comes to the shareholders they must be individuals, estates or certain qualified trusts that have consenting in writing to the S corporation election. But keep in mind that the shareholders cannot be non-resident aliens in an S corporation.
What is the structure of a corporation?
In a corporation the organizational structure consist of three different levels, Shareholders, Directors and Officers. The shareholders are the owners of the corporation. The directors manage the affairs of the corporation and are responsible for creating and implementing general business policies of the corporation. And the officers of the corporation are responsible for handling the day to day affairs of the corporation. In most states a single person can be the shareholder, director and officers of the corporation. But if your corporation is going to have numerous people doing these jobs the shareholders elect the board of directors and the board of directors elect or appoint the officers for the corporation.
How to incorporate a business?
This is actually a very easy and straightforward matter, especially if you have an attorney. And for the most part it is only going to cost you a few hundred dollars, but this will actually depend on the complexity of the corporate structure. If you choose to do it yourself you are just going to have to pay the filing fees that are associated with forming a corporation in your state.
But in order to form a corporation you are first going to have to prepare and file articles of incorporation with your State's Secretary of State. Once that is done you are going to need to prepare by-laws and organizational minutes. But in addition to this you will need a Federal Employer Identification Number (Form SS-4) from the IRS; this is what allows you to file your tax return for your business. If you have more than one shareholder you are going to need a buy-sell agreement. The reason for this is that this is used to ensure that the shares do not pass to shareholders unacceptable to other shareholders.
Once you have formed your corporation you or your attorney are going to need to attend to annual filings with the state. For the most part what you are going to need to be concerned with is a statement of officers and directors that is usually required to be filed every one or two years. But you are also going to want to ensure that you stay in compliance with your state's corporate requirements, which having an attorney for this can be very helpful in keeping up with any new laws.
The best news is that all of this can actually be online through an attorney's office or you can find online services that offer you online incorporation for a small fee in addition to the fees that you are required to pay to file your paperwork. If you decide to incorporate your business online through a service or an attorney you are going to want to do plenty of research on the company and what is required for forming a corporation so you know that everything is getting done that is supposed to be.
What are the requirements for the director of the corporation?
Most of the states will only require that a corporation has one director, but some states will require that there be more than one director so be sure to check with the state before you actually incorporate your business. But when it comes to the director of the corporation they must be an adult, but the good news is that they are not required to reside within the state of incorporation. But the best news is that when it comes to the director they can also be the director and hold all offices, which means one person can do it all when it comes to a corporation. This is entirely true because a shareholder can also serve on the board of directors and as an officer.
What is a registered agent?
Basically a registered agent provides a registered address for the receipt of service of legal papers. But a registered agent also serves as a local contact for the Secretary of State and other government agencies. The registered agent is used to receive notices of any suits, tax notices, and any other legal document and then they are responsible for forwarding them onto the corporation.
Can you act as your own registered agent as long as your registered address is within the state that you are incorporating in?
This is entirely possible for you to do, but if you decide to register your state in another state you are going to need a different registered agent. For the most part companies that help you incorporate your business online can provide you these services if those services are required in the state that you are incorporating in, which if you choose Nevada or Delaware these services are always required.
How long does the incorporating process take?
The amount of time that is going to be required in order to incorporate your business is going to vary depending on which state you choose to incorporate your business in. But it is also going to depend on the company that you use to incorporate your business online. Some companies offer expedited services, which means they can incorporate your business within three to five business days or in some states they can get everything done in one day. But for the most part incorporating your business is going to take anywhere between three and four weeks.
Where should you incorporate your business?
When deciding to incorporate a business one of the first things that you will need to decide is where to incorporate that business. And with online incorporation services this question is even more important to answer because you can incorporate your business anywhere you wish with online services. But for the most part it is best to incorporate your business in the state in which the business is located and plans on doing business. This is usually the most practical option, but it is also the least expensive option. Not to mention the fact that if you plan on incorporating in another state and doing business in the state that you live in you are actually violating your state laws because you are avoiding taxes and such in the businesses primary state of doing business.
Privacy Policy, Terms of Use