Quick Incorporate

If you are wondering whether incorporating would be the right option to exercise for your business, it could be helpful to understand the elements of a corporation before making that decision. So, let us look at these elements.

The shortest definition of a corporation is that it is a legal entity created by a state filing, which has a separate existence from its owners. It is a creature of legal fiction because it is an artificial entity, which only exists in the contemplation of the law.

A corporation is created when your articles of incorporation have been completed, filed and approved by the proper authority, usually the state’s Secretary of State. Some states call the articles of incorporation a ‘charter’ or a ‘certificate of incorporation’. Read the rest of this entry »

As your business grows it is likely you will find that you need to grow the structure of the business to meet the demands. Many small businesses start out as a sole proprietorship, meaning you are responsible for everything, but soon with increasing income, partners and the need for more capital you may find it is time to change the legal structure to take advantage of tax savings, liability concerns and the ability to raise capital to expand.

Corporations provide the ability for a business to raise capital through share offerings, to exist as their own entity and reduce the personal liability of its owners and shareholders. In addition, there are tax advantages that come with being a corporation – such as the ability to write off health and benefit plans of employees. It is often said that a corporation has a “life of its own” and as such, can exist well beyond the lifetime of the original owners. Read the rest of this entry »

Businesses can be incorporated in any state in the U.S., regardless of where the business is operated. Corporate laws vary from state to state. Many small business owners prefer to incorporate in their own state, to reduce costs as well as to simplify the incorporation process. If a business owner incorporates in a different state, then he still needs to qualify himself to conduct business in his own state. Business owners incorporating in their own state, also save on paying franchise taxes and filing annual reports in two different states. Business owners usually choose the state where they want to incorporate, depending on the taxation rules of the state and their registration requirements. Delaware and Nevada are the most favored states for incorporation as they are very corporate-friendly. Incorporating in Nevada has extraordinary benefits for business owners such as tax benefits and liability protection benefits. Read the rest of this entry »