Why Select Us to Incorporate You?
Most of the focus is on getting the registration completed as quickly as possible without consideration for the tax and other consequences of your actions. As CPA’s, our approach is what makes the most practical sense for you. Making a mistake before you even start can be costly down the road.
Read through Frequently Asked Questions Before Incorporating!
Frequently-Asked Questions
- Why Should I Incorporate?
- What Do You Charge to Incorporate?
- Which State Should I choose?
- What Type of Entity Should I Choose?
- What is a “Pass Through Entity”?
- What is Included in Articles of Organization?
- What is Included in Articles of Incorporation?
- Do I Need an Employer Identification Number (EIN)?
- COMPARISON CHART
- COMPARISON TABLE
Answers
Why Should I Incorporate?
Limited Liability – Setting up a corporation can minimize exposure to being held personally liable. Owners are not personally responsible for the debts and liabilities of the business and as a result creditors cannot pursue owners’ personal assets to pay their business debts. In a sole proprietorship or a general partnership, owners and business are legally considered the same and personal assets can be used against business debts.
Tax Benefits – Tax advantages exist in certain states; please consult with one of our employees.
Unlimited Life – A corporation has a life of its own and does not depend upon an owner for its existence. A corporation possesses unlimited life, meaning if an owner dies or wishes to sell his or her interest the corporation will continue to exist.
Transfer of Ownership – Through ownership of stock it is easy to transfer ownership in the company.
What Do You Charge to Incorporate?
A fixed fee of $150 plus state required fees.
What State Should I Choose?
You are not required to incorporate in the state where your business operates; you may choose from any of the 50 states or the District of Columbia.
In making your decision where to incorporate, three factors come into play:
- The location of your facilities.
- Qualifying to do business as a foreign corporation.
- Determining the advantages and disadvantages of each state’s corporate laws and the tax structure.
The decision usually runs between the state of residence and Delaware, however, if the corporation is a closely held organization that does business primarily within a single state, local incorporation is typically the best decision. The cost of a local incorporation will usually be less than incorporating in another state.
What Type of Entity Should I Choose?
Remember that nothing is irreversible; however, this is one issue you want to match up to your needs and get it right up front.
The standard corporation, also called a C-Corporation, is the most common corporate structure. The corporation is a separate legal entity owned by the shareholder(s). Shareholders cannot be held personally responsible for the debts of the corporation. The shareholders’ personal liability is typically limited only to the amount the shareholder invested in the company.
Taxation implications are usually a significant consideration when deciding which corporate structure to choose. The shareholders of C-Corporations may experience “double taxation,” which simply means that corporate profits are taxed at both the entity and individual levels. Profits of the business are reported and taxed at the entity level first. Then, if the corporation distributes any portion of the remaining profits to the shareholders in the form of dividends, the shareholders must report the dividend as personal income and pay taxes on it at the individual level.
What Is A “Pass-Through Entity”?
A “Pass Through Entity” means any income or loss of the business tax return is reflected on the personal income tax return.
What is Included in the Articles of Organization?
Articles of Organization typically would include:
- Article 1 - Name of the Company.
- Article 2 - Registered Office and Registered Agent.
- Article 3 - Statement of Purpose.
- Article 4 - Management and Names and Addresses of Initial Members.
- Article 5 - Principal Place of Business.
- Article 6 - Period of Duration of the Company.
The Articles of Organization must be signed by the Organizer and filed with the state where you are incorporated.
What is Included in the Articles of Incorporation?
Articles of Incorporation typically would include:
- Article 1 - Name of the Company
- Article 2 - Purpose of the Corporation and the Number of Shares
- Article 3 - Exemption Requirements
- Article 4 - Duration
- Article 5 - Membership of Directors
- Article 6 - Personal Liability
- Article 7 - Dissolution
- Article 8 - Incorporation
Articles of Incorporation must be signed and filed with the state.
Do I Need an Employer Identification Number (EIN)?
Every company is different. Go on-line with the IRS http://www.irs.gov/pub/irs-pdf/fss4.pdf page 2 of 2 and follow the instructions. On the back of Form SS-4, you will find the answer to this question. ( You are going to need Adobe Acrobat to access the file. )