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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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.