What are the benefits of incorporation?
A corporation can provide many benefits. A corporation can help limit your personal liability as a business owner. In general, creditors of your corporation must satisfy their claims by seizing the assets of the corporation rather than your personal assets. In contrast, as a sole proprietor or partner in a partnership you are financially responsible for all liabilities of the business, and your personal assets are subject to seizure or lien by creditors. Other benefits of incorporation can include greater tax deductions for health insurance and medical expenses, lower payments for social security tax and medicare tax, and greater opportunity to raise capital for the business through the issuance of stock.
Are non-U.S. residents allowed to own a Corporation or LLC?
Non-US residents can be the owners of a C Corporation or an LLC (limited liability company), but an S Corporation cannot be owned by non-US residents.
If I incorporate, will doing so prevent others from using my company name?
Incorporating will not keep another business from using your name. Generally, every business must protect its own business name and the good will that it has acquired from the sale of its goods or services in a specific geographic area. Filing articles of incorporation only prevents the secretary of state from filing a document to create another corporation, limited liability company or limited partnership that has the same, a deceptively similar, or similar name as the entity already in existence.
Does incorporation require me to complete extensive paperwork?
No. By using the CorpDocuments.com service, incorporation is a simple process. The Confidential and Secure Order Form contains all of the information necessary for us to form your corporation in any state. CorpDocuments.com will handle all details of forming your corporation. We can also assist with the formation of a limited liability company, limited partnership, or nonprofit corporation.
How long is the incorporation process?
Processing times for incorporating a company vary amongst the different states and change constantly depending on the workload at the state office. Please ask one of our representatives for our most current approximation of the processing time for Articles of Incorporation within your state of incorporation.
In which state should I incorporate?
Generally, you should incorporate in the state where your office is physically located. If you incorporate in another state such as Delaware, you may need to submit an application to qualify as a foreign corporation in the state where your office is physically located.
Are there annual filings if I incorporate?
Yes. In general, corporations file an annual tax return (IRS Form 1120 or 1120S) and a simple one page annual state report that updates information such as the address of the corporation and the names of its current officers and directors. (The names of the shareholders are generally not listed in the annual state report.) Note that annual tax returns are also filed by sole proprietorships (Schedule C to IRS Form 1040), limited liability companies (IRS Form 1065) and general partnerships (IRS Form 1065).
How many directors and officers are required to form a corporation?
In most states, one person is enough to form a corporation. The same person may hold the offices of President, Secretary and Treasurer and may be the only person on the Board of Directors. The officers manage the daily business of the corporation based on the instructions of the Board of Directors.
Who owns the corporation?
The corporation is owned by the shareholders. A corporation may have one or more shareholders. In general, since the shareholders elect the persons who serve on the Board of Directors, the corporation is controlled by the shareholders. The shareholders who own more than 50% of the corporation's stock get to make the ultimate decisions about running the corporation.
Do I need a Law Firm to form a corporation?
No. To determine the value of incorporation for your business, we suggest you consult with your attorney or tax advisor. To form your corporation, however, you may use our incorporation service to save money on the administrative aspects of incorporation. Our service is used worldwide by attorneys, accountants and business owners. CorpDocuments.com offers competitive prices and the highest quality incorporation in the United States.
What is a nonprofit corporation?
The process to form a "for profit" versus "nonprofit" corporation is similar, but the text of the articles of incorporation is different. There are no owners in a nonprofit corporation. Instead, a nonprofit corporation is controlled by a board of directors. The profits of a nonprofit corporation may not be paid to the "founders" of the nonprofit, except that the founders may receive compensation for the fair market value of actual services provided to the nonprofit. In general, a nonprofit corporation is exempt from federal income tax, except with respect to unrelated business income. If a nonprofit corporation will seek charitable contributions from the public, the nonprofit must apply for 501(c)(3) status, which is a separate application that should be filed within 15 months after incorporation of the nonprofit.
What is a C corporation?
The term C corporation refers to the way in which the corporation is taxed. There is a corporate level income tax on the profits of a C corporation. In addition, if a dividend is paid to shareholders from retained earnings, the dividend is included on the personal tax return of each shareholder. Thus, the profits of a C corporation are subject to potential double taxation. Your corporation will be taxed as a C corporation this year unless you timely file IRS Form 2553 to elect tax treatment as an S corporation.
What is an S corporation?
The term S corporation refers to the way in which the corporation is taxed. An S corporation is a pass through entity. There is no corporate level income tax. Instead, a pro rata portion of the annual profit or loss of the S corporation is included on the personal tax return of each shareholder. If IRS Form 2553 is filed within 75 days after incorporation, the corporation will be treated as an S corporation for tax purposes. Many start-up businesses benefit by making the election to be taxed as an S corporation.
What is the difference between a corporation and an LLC?
Corporations are formed pursuant to state law and have shareholders, are managed by a board of directors, and the daily affairs are administered by officers. Similarly, a limited liability company (LLC) has members and may be managed by one or more managers. Most often, both entities must pay franchise taxes, but may have different federal tax liabilities.
Generally, most people form corporations or limited liability companies in order to shield the shareholders or members and from personal liability for the debts and obligations of the entity. There may also be various tax advantages to forming these entities which may not be available for sole proprietorships and general partnerships.
CorpDocuments.com cannot provide information as to whether a person should incorporate or form a limited liability company or a partnership. If you are contemplating forming any of these entities you should consult with private counsel regarding your individual fact situation.
What is a Registered Agent?
Almost every state requires a corporation or an LLC to have a Registered Agent (sometimes called a resident agent, statutory agent, or agent for service of process). The Registered Agent address is the address that will be used by the state for any official legal and tax correspondence. The Registered Agent address must be a physical, in-state street address; P.O. Boxes are not acceptable.
NOTE: If you require us to provide a registered agent, the address cannot be used as a general business/mail forwarding address. Only official legal and tax correspondence from the state will be forwarded, and any other mailings to the registered agent may result in additional charges.
Why must my business designate a Registered Agent?
Any entity conducting business within virtually every state must register to do business in that state, designate and maintain a registered agent, and in some cases a registered office.
What is the purpose of a Registered Agent?
A Registered Agent acts as the representative for accepting Service of Process served upon the company within the jurisdiction of any state where the company conducts business. Service of Process is broadly construed to include any legal proceeding, legal notice, or official government communication presented to the company while it is within the jurisdiction of a state.
What happens if my company fails to register or designate and maintain a Registered Agent?
The failure, to register and designate a registered agent, may foreclose or hinder the company's ability to legally enter into contracts and gain access to the state courts. Moreover, it may subject the company to monetary, civil, and possibly criminal sanctions. Also, failure to maintain a registered agent may cause your company to fall out of "good standing" within the state. This will subject your license to do business within a state to forfeiture, with monetary penalties assessed to reinstate your company to a "good standing" again.
What is a Federal Employer Identification Number?
If you plan on opening a bank account under your corporate name most banks will require that your corporation have a Federal Employers Identification Number.
A Federal Tax Identification Number (also known as a "95 Number" or "EIN Number") is a number assigned to a corporation or L.L.C. by the Federal Government for purposes of taxation. The Federal Tax ID Number is to a corporation or L.L.C. as a Social Security Number is to an individual. Most banks require that a corporation or L.L.C. obtain a Federal Tax Identification Number as a prerequisite to opening a bank account regardless of whether the company will have employees.
Must I file a D.B.A. ('Doing Business As')?
Individuals and unincorporated entities that regularly conduct business using an assumed name (often referred to as a "d.b.a.") must file an assumed name certificate with the county clerk in each county in which business premises are maintained. If corporations, limited liability companies or limited partnerships (entities created by filing with the secretary of state) do business with a name that is different than the name set forth in the organizational documents, they must file assumed name certificates in the county or counties where the registered office and the principal office are located, and must also file with the secretary of state.
What do I need to do after I place my order?
Once your order is placed we will immediately begin processing the formation of your company. If additional information is required we will contact you for the necessary information. We handle your formation from beginning to end, and make sure that your formation is filed quickly and correctly.
If you did not find the answer to your question, please send us an EMAIL and we will respond as soon as possible. INFO@CORPDOCUMENTS.COM