Internet Guide to Incorporating your business
Eric Jenkins
The decision to incorporate your business is a very important one and one which should involve careful research and attention. Below are descriptions of incorporation options available to you. However, the websites listed are directed at providing information for individuals interested in forming a C corporation.
STOCK CORPORATIONS:
General Corporation: The most common of all corporate structures is the general corporation. The General Corporation, like all other corporations, is a separate legal entity that is owned by stockholders and shareholders. A general corporation may have an unlimited number of stockholders. Due to the legal nature of the corporation, stockholders are protected, personally, up to the amount of their investment, from the creditors of the corporation.
Close Corporation: A close corporation has a few minor differences as compared to general corporations. In most states where they are recognized, Close Corporations are restricted as to the number of shareholders, usually between 30 - 50. The shares of stock upon sale are to be offered to existing shareholders first. Generally, a close corporation is particularly suited for the entrepreneur looking to operate a one person corporation or for a small group of individuals who will all actively participate in the operation of the business.
S-Corporation: S corporations have the same basic advantages as general or close corporations, but differ in it's tax treatment. Where as the previous corporations file and pay federal taxes on profits of the corporation, the S corporation eliminates Federal Corporate Income Tax. The IRS allows all profits to "pass through" to the shareholders personal tax return. This avoids "Double Taxation" or being taxed at both the corporate and personal level. An S corporation is formed from a General or C-Corporation. The S-status filing must take place within 75 days of the formation of the corporation. All stockholders must elect the S corporation status by filing the federal forms necessary.
NON STOCK:
Non-Profit: These are corporations that meet the requirements in Section 501(c)(3) of the IRS code. They are non profit corporations. Traditionally, most schools, churches, and organizations that provide benevolent services elect to incorporate under this method. For the organization to qualify for exempt status, its organizing instruments must contain a proper dissolution clause, or the state law must provide for the distribution of assets for one or more exempt purposes upon dissolution. The organizing instrument must also specify the organizational purposes and the purposes specified must be limited to one or more of those set out in Section 501(c)(3) of the IRS Code.
WEBSITES:
1. http://www.incorporate.com/html/information.html
This site can calm many of your fears about making the step toward incorporation by providing you with "all you need to know to incorporate your business." The site offers information on the advantages and disadvantages of incorporation, the costs of incorporation, and a description of the different types of incorporation. This site has an interesting FAQ feature that gives answers to the most common questions of incorporators.
Incorporating can seem to be a difficult task, but with a little information and the help of The Company Corporation, you can have your business incorporated in as little as 24-48 hours.
2. http://www.delawareinc.com/
Harvard Business Services developed this site to offer no-to-low cost incorporations services for small business owners. If you need information about incorporating in Delaware, this website is dedicated to providing you with answers.
One of the most beneficial features on this site is the pre-Inc. checklist. This checklist lists all the steps incorporators should make before and after filing. The site is extremely user-friendly and easily navigable throughout.
Use this site’s "Incorporation Handbook" to furnish you with authoritative and accurate information regarding incorporation. Among other things this site’s Incorporation handbook gives prospective incorporators the top 35 reasons to incorporate in Delaware which is the state of choice for most corporations.
4. http://www.start-a-business.com/
Start-A-Business.Com was founded on the premise that entrepreneurs want and need a service that empowers them to achieve their business creation goals in the most cost-effective and expeditious way while maintaining the highest level of personal confidence in the quality of the services offered. As the first truly Internet-based company of its kind, SAB.C will do all of this and more. From online incorporation and domain name registration to offshore trusts and opportunities to partner with America's premier companies, SAB.C will work with you to make sure that you are off to the right start with a rock solid foundation.
This sites information on Offshore companies is really helpful. "Offshore" companies have been formed for many years as part of sophisticated tax structures. With declining tax advantages in recent years, offshore structures have increasingly been used to legitimately protect assets from frivolous litigation and to increase privacy.
5. http://www.corporateservicecenter.com/
Corporate Service Center is an incorporating company and resident /registered agent service for Nevada and Wyoming corporations and Limited Liability Companies. Their clients use their services for three main reasons:
1.) For asset protection
2.) To maintain their financial privacy, and
3.) To eliminate or reduce their state corporation income taxes