This is a general discussion of the requirements needed to establish a corporation.  This type of business entity should be considered when your are starting an online business.

What Are The Requirements In Establishing a Corporation?
 by: Jinky C. Mesias 

A corporation is the biggest type of business entity. So how does one creates one of these giants? But first it is important to define the term CORPORATION- a corporation is an artificial legal entity which is chartered by a state and formed to conduct business. A corporation is completely a distinct and separate entity from its owners, it has its own life and can be held liable for any debts that it may incur. A corporation is also required by law to pay its own taxes.

Every state has their own General Corporation Law or Business Corporation Law that permits practically anyone to acquire a charter in order to conduct a business. The mechanics involve in the creation of a corporation is termed as Articles of Incorporation and there is also a fee to be paid. The start of creating a corporation is with the filing of the Article of Incorporation and then the payment of the required fee to the state office or the office of the Corporation Commissioner. This process is common to the standard type of corporation however the same process occurs in both the limited liability company and the limited liability partnership since many of their offered benefits are the same as those of the traditional corporation.

 

The Articles of Incorporation are vital components of a corporation and therefore requires for the assistance or the presence of a counsel. The specific content of a certificate of incorporation differs from state to state. Nevertheless, the basic features are the same in all states and these are as follows: the corporation’s name, the number of shares authorized, the names and addresses of the incorporator/s and also included is the address of a registered office and agent for service of process.

When it comes to the filing there are different approaches that can be employed to hasten the processing. Some people make use of interactive software programs that can help quicken the filing process and then there’s the convenient tear-out form available in most guides to incorporating. There are also the easy to fill-in-the-blank forms that can be found in state offices. Incorporators may also seek the assistance of a corporate service company to help them in creating the corporation for them but of course within their set standards. Incorporators may also hire a corporate attorney to help them set up their corporation.

The creation of a corporation does not complete the entire part of the process of setting up a business. There are still some requirements that have to be satisfied and the hiring of an attorney to help in the creation of the corporation is by far the wisest decision that any incorporator may implement. The great thing about having an attorney to help in the creation of a corporation is that all the by-laws and resolutions as well as all the other legalities involved are correctly done. Not only that, incorporators are assured that all their rights and benefits are protected when the time comes for them to operate their business.

About The Author

Jinky C. Mesias

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Incorporating

The corporation was not a business or a government entity, but a combination of the two. Its government supporters–the monarchs– had the authority to write the trade laws and grant monopolies; its business participants–the chartered.

Choice of Entity – Corporation

Taxation: Since a corporation is an entity separate from its owners, the income of the corporation is taxed to the corporation itself at the applicable corporate tax rate. In addition to the corporate tax, employees pay income tax on their income received form the corporation.

LLC Converting to Corporation Can Elect S Status

The IRS posed two fact situations, one where an entity that was an unincorporated entity that is treated as a partnership elects to now be treated as a corporation, and a second case where such converts to a state law corporation under a state law formless conversion statute. All equity holders of the entities are eligible S corporation shareholders, and the resulting corporations are not otherwise ineligible to elect S status.

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An Explanation of LLC (Limited Liability Company)

What is an LLC or a Limited Liability Company? Read on for a brief explanation of LLC…

These are some good points to consider when your are starting an online business.  Know what type of business entity you want t create before you start your business as it is harder to change the structure once a company is formed.

In legal terms, a ‘company’ is treated as an individual entity – separate from its shareholders. That is why a company pays its own taxes, maintains its own accounts etc. The shareholders of a company are merely owners of small or large bits of the company. That is why they are considered separate from the company.

What is an LLC?

A Limited Liability Company or LLC is a legally formed company which has a limited liability for the owners.

The term ‘Limited Liability‘ means that the member or shareholder’s financial liability is limited to the amount of his investment in the company. Thus, he is not personally liable for the debts of the company. The only amount that he is liable to pay is the amount he has invested in the company -i.e. – the amount for the shares he is holding.

A LLC with several members is considered as a Partnership for the purposes of taxation by the Government. This ensures that double taxation is avoided.

If there is an LLC with just one member, the Government will treat it as a Sole Proprietorship Company and will be taxed accordingly.

An LLC can have an unlimited number of members.

An LLC has a lot of flexibility in terms of management. The owners of an LLC need not be U.S. Citizens or permanent residents. The owners can manage the company themselves, or hire someone to do the job. However, an LLC does need an Operating Agreement to clarify how and by whom the company will be managed.

In effect, this form of company is a combination of a corporation and a partnership. It gives the shareholders a tax advantage, and provides them with flexibility in creating a management hierarchy for business purposes. At the same time, their liability is limited. This also ensures that the risk of each shareholder is limited.

This type of company is prevalent in almost all parts of the world. Most organizations opt for this company type to ensure that their personal financial position is not threatened or imposed upon for the purposes of the company.

When the shares of a company are partly paid, even then the shareholders are liable for the entire value of the share.

An LLC need not hold Annual General Meetings and keep a record of its Minutes.

Overall, an LLC or a Limited Liability Company is a limited risk and extremely flexible, functional company structure.

By Madhavi Ghare Published: 3/2/2007

LLC is a Great Business Structure

A limited liability company, or LLC, can be best described as being a mixture of a partnership and a corporation. To put it simply, limited liability company give a business the best parts of a corporation without all of the protocols of a corporation.

Starting an LLC?

Adaptability – When operating as an LLC, you have greater choices in how to go about running your company. Adding additional owners is an easy process, which you cannot do as a sole proprietorship.

Consider LLC Formation

A limited liability company, or LLC, can be best considered to be a composition of a corporation and a partnership. To put it simply, an LLC give a business the good parts of a corporate structure but not all of the formalities usually associated with a corporation.

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