Starting Your Business -
Incorporating
Articles:
Incorporating Your Business ' Why Do it Online?
In this day and age, incorporating your business online is a viable option, and
definitely an option you should consider.
Will Forming A Limited Liability Company Do Me
Good As A Small Business Owner?
Incorporating a small
business is an easy process that can be completed in just days. In many cases,
an LLC is the best fit for a small business. Learn more about the LLC advantages
in this article.
Why Incorporating Online Is The Best Thing Since
Sliced Bread
At this point, everyone is looking for ways to cut costs in their businesses and
incorporating costs are no exception.
Sole
Proprietorships, LLCs & Corporations: A Guide To
Legal Forms of Business
For many business owners, it can be difficult to
understand the differences between various types of
legal business organizations. Across all types there
are benefits, drawbacks and rules that apply in
reference to tax, liability and structure.
How to Incorporate a
Business
The question of why incorporate a business has a
simple answer: a corporation is a legal
fiction that is used to protect the business owner's
personal assets from being taken should the owner be
sued.
The Entity Choices
Available for Incorporation
Easy access to the World Wide Web has made almost
everything faster and more convenient - including
taking care of legal matters when it's time for your
small business to incorporate online.
Protecting Your Business Assets
Engaging in business exposes you to the risks of
being sued. To save your personal and business
assets from the lawsuits, you must take legal steps
to protect it.
8 Advantages Of Incorporating A Business
Incorporating a business is not
difficult it can be done online or physically.
Anyone who has a business can incorporate his
business irrespective of size.
Even Small Business Owners Have Assets To Protect
If
you're a small business owner, you have assets to
protect. Usually associated with high income
individuals and medical professionals, asset
protection planning is just as necessary for owners
of start-ups and small businesses.
Necessary Documents in Establishing a Business
Along with our country’s incessant progress and
economic improvement, numerous people and entities
engage in putting up or expanding their business
operations. On a large scale, the increase on number
of these individuals and companies brings upon many
positive effects.
Tax
Benefits of Incorporation
Some companies may seem to escape
death, but they will ever be able to escape taxes.
That doesn't mean there aren't some tax benefits out
there, though, that only the corporations are
getting. Companies are tempted to incorporate for a
number of reasons, but more and more often, taxes
are the main motivator. But why?
The Pros and Cons of Becoming Incorporated
So you currently have your own business and you're
pondering over whether or not you should incorporate
it, or carry on as a sole trader? Before you make
the incorporation decision, you need to consider all
of the advantages and disadvantages that
incorporating brings. This article will set out to
explain the benefits and downsides to incorporation,
starting with the benefits ...
Incorporating Small Business Ventures
There are many ways you can utilize the ease and
value of online services to show you how to
incorporate small business ventures.
Why
Incorporate Your Business?
Entrepreneurs embark on costly business ventures
without first looking into the form of business that
would be most suitable for them given their business
experience and financial capability.
Incorporating Your Business ' Why Do it Online?
By
Richard Taylor
In this day and age,
incorporating your business online is a viable option, and definitely an option
you should consider. There are lots of online incorporation services to choose
from, and their services are pretty competitively priced.
Before you do incorporate
online however, there are lots of decisions that need to be made in advance.
For example, you need to
decide on the type of corporation that best suits your company. In particular
this decision is critical as it will effect how your business is taxed in the
future.
You also need to decide
before you start the incorporation process, the state in which your business is
to be registered in. Will it be your home state for convenience, or will you
take advantage of some of the benefits that incorporation in states such as
Delaware or Nevada provide?
Once these critical decisions have been made
(professional legal and financial advice should always be sought), you can turn
your thoughts to the actual incorporation process.
You could decide to complete
the legal forms yourself and file them with the Secretary of State, or you could
place the process in to the hands of your lawyer.
Alternatively, you could use
the services of an online incorporation company. The online providers will
complete most of the administration for you, but in most cases they won't
provide any legal advice.
Services typically offered
by these online companies include:
- checking of the legal
forms
- provision of registered
agents in the state you choose to incorporate your business in
- name availability checks
- filing and delivery of the
documentation
So what are the benefits of
incorporating online?
Firstly simplicity! You can
complete the process sat at your computer, with online step by step, screen by
screen guidance and advice.
You can literally complete
the process in minutes, regardless of which state you choose to actually
incorporate in. Simply fill in the online forms and hit the submit button, and
let the online provider do the rest.
Most online incorporation
services can handle incorporation in any state and know exactly what information
each individual state requires. They know how long the process will take by
state, the different incorporation fees that will be charged and the specific
details each state needs.
The incorporation process
becomes much simpler when you use an online service.
Another obvious benefit of
incorporating online is money. It will usually be less expensive to incorporate
online. Online services should be cheaper than hiring agents or lawyers to
process the documentation and forms for you. Web forms and the automation the
internet provides, saves on administrative overheads.
Providing the incorporation
of your business is straight forward, incorporating online will save you money
over the traditional incorporation methods.
About the Author: Business
Incorporation is a complex process. To learn more about the pros and cons of
incorporation, and find out more about incorporating online, go to:
http://www.incorporate-my-business.com
Article Source:
ArticlesBase.com
<TOP>
Will Forming A Limited Liability Company Do Me
Good As A Small Business Owner?
by
Ron Heller
Incorporating a small
business is an easy process that can be completed in just days. In many cases,
an LLC is the best fit for a small business. Learn more about the LLC advantages
in this article.
When you go on to legally
form your own business, you will in many cases be faced with a few options:
registering an llc, a corporation, a partnership or just be self employed. The
option of forming an llc is the one discussed in this article, as it is probably
the best one in many situations.
LLC stands for Limited
Liability Company. That means that the company is a separate legal entity from
the person who founded it. The meaning is that the person cannot be personally
responsible for the losses the company accumulates (except for his personal
investment in the company). It also means that the company itself can be sued
legally for matters that concern it's activity, and again, the person who owns
and/or controls the company is not responsible (with a few exceptions).
LLC's also enjoy several tax
benefits. The person who controls the LLC is required to pay tax only once on
the LLC's profits. He is than exempt from paying any personal tax on the profits
he gains from his LLC company.
Other advantages LLC's have
are that there is less paperwork and hassle to operate an LLC in compared with
an incorporation. There is no need for board and annual meetings, less files
and reports to submit to the authorities and regulatory bodies. All this leads
to the LLC being a very attractive alternative for small and medium sized
business, as a form of incorporation that has many benefits and few
disadvantages.
Forming a limited liability
company is a fast and easy process. All you need to do is decide on a company
name and location. You need to pay a fee and submit the papers to the Secretary
of State in the state where the LLC is to be registered. All US states permit
registering an LLC, so you'll have no problem completing the process in your own
state. Each LLC should have a Registered Agent with a street address in the
state where the LLC was registered. The Secretary of State office will provide
assistance to anyone who wants to register an LLC, and the process will be done
in a few days.
The choice of business
structure and the incorporation of it are important. LLC is a great fit for many
businesses, but not all of them. So, you'll probably be best to consult with a
lawyer before deciding on an incorporation that is best suited to your needs.
Author Information: Visit
llc-how-to.info
from Jane Ling, and learn about
forming llc,
llc starting and more
information about business forming
Article Source:
Article99.com
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Why Incorporating Online Is The Best Thing Since
Sliced Bread
by
Melissa Gordon
At this point, everyone is
looking for ways to cut costs in their businesses and incorporating costs are no
exception. It’s a pretty well known fact that online incorporation services cost
significantly less than hiring an attorney to complete the process for you. The
cost alone is enough to persuade anyone to incorporate online instead of hiring
an attorney.
But what other advantages
are there to incorporating online? You’d be surprised to hear how simple, easy,
and effective it is to incorporate online.
First of all, you can
incorporate your business right where you do business—at home. There’s no need
to travel around to different offices and meetings to complete the incorporation
process, you can do it all from your sofa. When every minute counts in your
business, the convenience of completing the process from home is a huge plus.
You can get incorporated in
a New York minute. The traditional incorporation method of hiring an attorney
can really drag out the process. But when you incorporate online, you can be
incorporated in no time at all. Not to mention, most incorporation services even
allow you the option of expediting your incorporation process. In just a few
weeks, you can be the proud owner of a corporation.
Incorporating online also
allows you to do business in different states. If you have a business with long
arms, you may need to reference other state laws or establish your corporations
in multiple states. When you incorporate online, you can do that quickly and
easily without moving an inch.
Not to mention, you can file
for just about any legal entity that you want online, in addition to
corporations. Whatever entity you’ve decided is best for your business can be
established through an online incorporation service. These days, you can do
almost anything you need online.
Incorporating online also
has many great services to help ensure that your entity is filed properly. A
good incorporation service will ensure that your forms are filled out correctly
and they’ll even do name checks to make sure that the name you’ve chosen for
your business is available. They will also deliver and file the necessary forms
for your business, many of which will be available for download on their site.
Online incorporation services are a one-stop-shop for all of your incorporation
needs.
The only thing that they
won’t do is make decisions for you. For many business owners, deciding which
entity is best for their business is the most challenging part of the
incorporation process. When hiring an attorney to incorporate your business, he
or she can provide you with legal advice and expertise that can help you make an
educated decision.
When you incorporate online,
it’s up to you to educate yourself. But with the resources available online,
most people can find the information they need to make their decision.
Incorporating online is easy, fast, and affordable. It’s turned a once lengthy,
costly, and frustrating process into a step that every business can afford to
take.
Disclaimer: This article is
for informational and entertainment purposes only, and should not be construed
as legal advice on any subject matter.
About the Author:
Melissa Gordon is the
publisher of LegalBuffet.com
, a complete online resource that compares the legal services offered by
various online companies. Find the best company for you and incorporate online
at LegalBuffet.com.
Article Source:
ArticlesBase.com
<TOP>
For many business owners, it can be difficult to
understand the differences between various types of
legal business organizations. Across all types there
are benefits, drawbacks and rules that apply in
reference to tax, liability and structure.
For many business owners, it can be difficult to
understand the differences between various types of
legal business organizations. Across all types there
are benefits, drawbacks and rules that apply in
reference to tax, liability and structure. What’s
important is to be able to clearly understand what
is right for your business.
Below is a brief compilation of the basic forms of
business ownership in the United States, emphasizing
those that are most attractive to small business
owners Remember: specifics of each can vary from
state to state, so be sure to check with your
state’s Secretary of State Office to understand what
is best for your business.
Sole Proprietorship: A sole proprietorship is an
unincorporated business that is owned by one person.
In this way, it is the simplest form of legal
organization to start and maintain. You, the owner,
include the income and expenses of the business on
your own tax return. Similarly, you are also
personally responsible for any business liabilities.
Limited Liability Company (LLC): Authorized only in
certain states, an LLC is a mixture of a corporation
and a partnership. LLCs are becoming a popular
structure for small businesses due to their
flexibility and low maintenance costs while still
offering most of the advantages of a corporation.
With an LLC, you separate your business and personal
identities, distributing the ownership percentages,
P&L and voting powers among owners. LLCs can also
offer tax savings, depending on how the LLC chooses
to be taxed (either as a partnership, S Corporation
or C Corporation).
S Corporation: After the corporation has been
formed, the stockholders may elect “S Corporation”
status by making a filing with the IRS. Like an LLC,
this is another attractive option for many small
businesses. An S Corporation is taxed like a
partnership — the profits and losses of S
Corporations flow through to the federal tax returns
of the owners in proportion to their stock
ownership. However, they are protected from the
liabilities of the business as in a C Corporation.
Corporation (”C Corporation”): In a C Corporation
structure, one or more stockholders are the owners,
managed by a board of directors elected by the
stockholders, and run by officers appointed by the
board of directors. However, a single individual can
be the sole stockholder, director and officer of the
company. All parties are protected from the
company's liabilities, including liabilities for
their own negligence when acting in their corporate
role, except in a few extraordinary circumstances.
The corporation files its own tax return and pays
taxes, which are graduated based on the company’s
taxable incomes.
The ins and outs of each type of business
organization as well as the state variances can
appear to be overwhelming. Most important, educate
yourself, talk to a professional, and consider all
your options carefully. For more details, visit
http://www.irs.gov/businesses/small/article/0,,id=98202,00.html
Author Information:
Andrew Brown and Small Business Guru provide
Coaching, Inspiration and Practical Advice for Small
Business Owners and Entrepreneurs. Subscribe to the
free, weekly newsletter at
www.small-business-guru.com
Article
Source:
Article99.com
<TOP>
How to Incorporate a
Business
By
Wayne Hemrick
The question of why incorporate
a business has a simple answer: a corporation is a
legal fiction that is used to protect the business
owner's personal assets from being taken should the
owner be sued. If you are a sole proprietor, you might
be considering making the switch over to incorporation.
When you are ready to learn how to incorporate, business
owners should know that they can use services that allow
them to incorporate online.
How
to incorporate depends on what corporate structure you
wish to use for your business. There are four basic
types of incorporation, and they include the LLC, an
S-corporation, a C-corporation, and a non-profit. There
are several factors that go into the choice of which
structure to use. You will need to decide if your
business has a great amount of growth potential, or if
what you are selling has the potential of causing injury
to people who purchase the product or service and if you
could be sued for damages. You will also have to decide
how much paperwork you are prepared to deal with, or if
you have the resources to hire a professional
accountant. Another question to consider is if your
business will be conducted outside of your home state.
If
you answer in the negative to all of the above
questions, then an LLC might cover your business's
needs. If you find yourself answering affirmatively to
one or more of the questions, then you will want to
seriously consider utilizing the S-Corporation
structure. Some states offer more protections and
privacy with less regulation than others, so you will
need to think about the scope of your business.
There are many organizations that are ready to help you
get started with the process of online incorporation.
When you are considering incorporating, business owners
are pleased to discover that filling out the required
paperwork does not require a legal professional. Having
said that, business law is very complex, and it is easy
to make mistakes that can cost you big bucks, so many
business owners like to have a professional handle this
aspect for them.
You
may want to consult with your tax adviser or accountant
for help with incorporation, or you could hire an
attorney. The last is not the least expensive option,
however, and can sometimes be priced out of a small
business owner's budget. A popular way to get help with
incorporating is to use an online incorporation
service. These economical services help you with all of
the appropriate paperwork you will need in order to get
set up as a corporation. They are also prepared to do
so in each state in which you would like to do
business. When you incorporate online, the fees and
services offered can vary a great deal, so it pays to
comparison shop for these services in order to find the
best service at the best price.
Wayne Hemrick offers advice to
business owners on
incorporating business. He advises owners on using
online incorporation services and provides insights
on
how to incorporate business online.
Article Source:
Free-Articles-Zone.com
<TOP>
by
Wayne Hemrick
Easy
access to the World Wide Web has made almost everything
faster and more convenient - including taking care of
legal matters when it's time for your small business to
incorporate online. Most small businesses will choose to
form an LLC, or "limited liability company," but this
particular choice may not be right for every business.
As you will see, when you decide to incorporate online,
there are several different options available.
Why
Form A Corporation?
Although it makes things more complicated all around, if
you are self-employed and in a line of work in which
liability is an issue - particularly landscaping and
construction, financial services or consulting - it's a
very good idea to form an LLC, or some other kind of
business entity.
The
reason is protection of your personal assets. Suppose
you are a sole proprietor who provides landscaping
services, a nursery provided you with shrubs that turned
out to be poison, and you client or one of their
children or pets became very sick as a result. That
client would be within his/her rights to sue for
everything you own - you car, personal possessions, and
even your home.
However, if you operate your business through an entity
such as a Nevada limited liability company, that client
could only sue the business - your own personal and real
property would be considered separate by the courts and
therefore "hands off."
Online incorporation allows you to protect your own
property in the event that your company incurs some kind
of liability. It also protects your own personal credit
should the business run into financial difficulty, as
the business itself has its own credit file separate
from yours. In addition, there are
several tax advantages to online incorporation.
What
Choices Are There?
How
you decide to incorporate online depends on several
factors, such as the size of the company and how much
control over its operation you are willing to
relinquish. The most common are:
*
LLC: You can form an LLC with just one person. It is an
"enduring entity," meaning that you can legally transfer
it to another party. A Nevada limited liability company
has particular advantages.
*
C-Corp: This is the most common type of corporate
entity. This is also
good to consider when incorporating in Nevada, but
only if your company is large enough to justify it.
*
S-Corp: When you incorporate online and chose this
particular form, you are basically choosing to operate
like a C-Corp, but electing to be taxed differently.
This may be appropriate for many smaller companies that
are nonetheless too large for one person to run
efficiently.
Incorporating in Nevada
Nevada is one of those states that are known as
"corporate havens," and with good reason. Primarily,
when you incorporate online and choose Nevada as the
state of registration, you'll pay less in fees and enjoy
greater protection; in addition, a Nevada Limited
Liability Corporation can be considered sufficiently
capitalized at levels as low as $200.
Consider Online Incorporation Today
It
is relatively easy and inexpensive to incorporate
online; often, you can do it yourself. If you prefer,
there are also many companies online that can assist you
with the process of incorporating in Nevada.
Wayne
Hemrick provides businesses with advice on how to form
an LLC in Nevada. An LLC in Nevada offers many benefits,
and Wayne explains the options available when
considering incorporating in Nevada.
Article
Source:
Amazines.com
<TOP>
Protecting
Your Business Assets
by
Manuel Salvacion
Engaging in business exposes you to the risks of
being sued. To save your personal and business
assets from the lawsuits, you must take legal steps
to protect it.
Incorporating is a means of guarding against the
potential threat of lawsuits and various claims:
•
Single Incorporation – Protecting your personal
assets Incorporating a business is like erecting a
legal wall to separate your personal assets from
your business.
In
any event, any judgment against your business will
not affect your personal assets. Your home, savings,
stocks, properties, etc. remain intact and
protected.
•
Double Incorporation Strategy – Protecting your
business assets The double incorporation strategy
involves the creation of two business entities. The
first entity, which is the “at risk” business, is
the one that interacts with people and customers.
The
second business entity is the “holding corporation”
which is created to own the valuable assets and
properties of the company such machinery, equipment,
popular domain name, custom software, and other
items. The holding entity leases its assets to the
“at risk” company to operate the business as a
whole.
In
any case, when a judgment is rendered on your “at
risk” business, the second entity which the holding
company, will retain possession of your property,
assets, and equipment.
The
Process of Incorporation in California
If
you need to do business in California, you need to
protect your interest by having a formal business
entity. Incorporation is the way to shield your
business from lawsuits and claims. You can only
achieve this by incorporating your business to give
it an official name and a legal background.
The
incorporation process in California normally takes
only two weeks. With the help of a good business
lawyer, you can begin the process at the office of
the Secretary of State. The process will require you
to obtain business documents such as business name,
a bank account, filing of all papers to form the
entity, creation of bylaws, minutes and stock
issuances to make the entity valid.
Who
Can Help You
If
you are going to incorporate a business in
California, it is necessary to have a good
understanding of the bureaucracy. A business lawyer
who specializes in corporate matters can help you
protect your personal as well as business assets.
His skills, experience and expertise in the area of
the law can assist you in processing the
incorporation papers of your business.
Know more about how to protect your business assets
through the expert
attorney services of a California business
lawyer.
Article Source:
Amazines.com
<TOP>
by
Arthur Raise
Incorporating a
business is not difficult it can be done online or
physically. Anyone who has a business can
incorporate his business irrespective of size. There
are many types of corporations available in the US
so before you incorporate your business learn about
the different kinds of business structures available
in the US. You must also find out what the
advantages and disadvantages of incorporating
business in different states are.
Incorporation of a
business can be handled by a qualified lawyer or
professional incorporating services. The main
document that has to be filed for incorporating a
business is known as the ‘articles of
incorporation.” And, filing fees need to be paid to
appropriate state agencies.
Incorporating a
business has several advantages. Even if your
operation is a single person one forming a
corporation means creating a separate legal entity
which is a separate individual. According to
business gurus incorporating is a must as it:
1.
Protects the owners from personal liabilities. This
means you and your family or partners will not be
legally liable for any business related payments in
case of debt. Incorporating a business protects your
home and personal assets from risks.
2.
Corporations pay lower taxes and do not pay social
security, Medicare, and workers compensation and so
on. This is almost 15.3% in taxes and payable by
individual proprietors. As a corporation you will
save money.
3.
Incorporating a company as a c-corporation can save
almost 15% tax. By dividing the income between the
corporation and shareholders business save thousands
of dollars every year. Greater savings lei in
re-investing profits in other business ventures and
employee perks.
4.
Corporations can deduct business losses and these
can be carried back three years and forward for 15
years.
5. In a
corporation, great savings are made by introducing
retirement plans and corporate matching programs.
6. A
corporation ensures continuity of the business even
after the demise of the owner or shareholder.
7. Setting
up a corporation results in adoption of modern
management techniques and creation of central
management systems. This prevents duplication of
efforts and smooth functioning of the organization.
8. Setting
up a corporation means ownership can be easily
transferred by transferring the stock held.
Incorporation
lends business longevity and protects it from
inheritance squabbles. Incorporation can also be
done such that it offers anonymity to its owners.
When a business is a corporation it is easier to
raise capital and sell stock or equity to raise
operating funds. Investors and financial
institutions are less likely to invest in a company
that is individually owned.
Arthur Raise is a
writer for
1866incorporation.com , the premier website to
find incorporation, business incorporation services,
offshore incorporation, incorporation services,
selective incorporation, online incorporation,
articles of incorporation and many more.
Article Source:
SubmitYourNewArticle.com
<TOP>
Even Small Business Owners Have Assets To Protect
by Eric Reed
Unfortunately,
asset protection is often ignored or lost in the
long list of things to do when starting or building
your business. This mistake can cost you and your
family when you least expect it.
What's Involved in
Protecting Your Assets?
Asset protection
planning is a simple concept. First you catalogue
all of your personal and business assets, such as
bank and brokerage accounts, personal property and
real estate, etc. Next you identify possible
financial threats and then you insulate yourself
from threats using a combination of different legal
entities (trusts, corporations, limited liability
companies, etc.) and insurance.
Properly done,
this will help protect your current and future
assets from loss due to the hazards of everyday
life, such as lawsuits, business failures, and
creditor claims.
To create an asset
protection plan, you'll need to review your
potential exposure to financial loss, assess the
different types of protection available, evaluate
potential tax issues involved and analyze your
ongoing personal financial needs, such as qualifying
for mortgages and easily accessing assets when
required. You should work with competent financial
and legal advisors who are familiar with asset
protection strategies.
Small Business
Owners Beware
As a small
business owner, there are several areas that warrant
your concern. The first is to take financial
liability issues into account when you choose the
type of legal structure within which you'll run your
business (corporation, limited liability company,
etc.). Once established, take care to follow the
legal requirements of the entity you choose, so that
you don't jeopardize your personal assets. Some
examples of this are not mixing business and
personal expenses, not treating your business bank
accounts as personal piggybanks, keeping necessary
records, having the proper corporate officers and
establishing a Board of Directors in corporations.
Personal
guarantees are another common source of financial
exposure. Lenders, landlords and leasing companies
often ask for a personal guarantee from the owner of
a small business. This means exactly what it says;
you are providing a personal guarantee of repayment.
If your business can't make the payments the
creditor can and will go after you and your personal
assets.
Many entrepreneurs
use personal credit cards and credit lines to get
started. This may give you the credit you need, but
it is ultimately a personal obligation. So if your
business doesn't have the cash flow to pay the bill,
you'll have to deal with these credit balances
yourself. And the hefty finance charges can add up
fast. Use extreme caution when leveraging personal
credit for business use.
And then there is
insurance. Small businesses often underinsure to
keep overhead expenses low. This is risky. Losses do
happen and they can quickly put an under-protected
company out of business or hamper it severely. Be
realistic when evaluating the type (liability,
property, malpractice, etc.) and the amount of
insurance you carry.
Be Safe, Not Sorry
- Protect Your Assets
Depending on your
individual situation, there are a variety of asset
protection tools from which to choose ranging from
the relatively straightforward, such as insurance,
to the extremely complex involving off-shore trusts
and multiple legal entities.
Seek the advice of
business advisors and attorneys who specialize in
this area. It is an investment in your financial
security. Once you are on the wrong side of a
lawsuit, it is too late to protect your assets.
Eric Reed is a
Principal consultant with Integrated Global Business
Solutions. Eric has implemented many customized
consulting strategies for clients ranging from small
to mid-sized businesses to Fortune 500 companies.
Learn more about Integrated Global Business
Solutions at
http://www.igbsinc.com.
Article Source:
BylamoArticles.com
<TOP>
Along with our country’s incessant progress and
economic improvement, numerous people and entities
engage in putting up or expanding their business
operations. On a large scale, the increase on number
of these individuals and companies brings upon many
positive effects.
Primarily, this includes employment stability and
internal revenues that fund government programs,
developing further our economy and sustaining our
population’s basic needs.
In
line with these, it is necessary for these business
entities to file certain documents with the
government to legalize their operations and lessen
the possibility of civil liabilities resulting from
lawsuits.
Unlike what some entrepreneurs know, carrying out a
business is governed by the state laws rather than
federal statutes. This explains why individuals and
even corporations are required to file their
applications to the Secretary of State of their
particular area in establishing their business
entities.
Various states lay down clear and well-detailed
process of application while some has law statutes
that make it hard for companies to file their
applications. However, the business applicants may
submit the requirements through the website of their
corresponding states.
Establishing a Corporation
Generally, the establishment of a corporation
necessitates well-drafted articles of incorporation.
Its structure varies depending on the state where a
company will be doing its business. Yet, it is
common in every state oblige companies to include
the following items on their articles of
incorporation.
• Name of the corporation
• Number of allowed shares
• Name and address of a registered
representative
• Name of incorporator
• Description of the corporation's
purposes
After this document has been filed with the
Secretary of State for review and approval, it will
be returned to the applicant for records purposes.
Usually, it is not necessary for corporations to
submit copies of their bylaws, minutes of
organization and shareholders’ personal details.
Establishing a Limited Liability Company
Similarly, limited liability companies are also
required to submit a document that states same
contents as to a corporation’s articles of
incorporation. Nevertheless, majority of states in
the U.S. compel these companies to utilize a
customized form printed by the state government.
Hiring an Attorney’s Assistance
Although a sole proprietor may handle the filing of
his business application alone, it would be more
comfortable to seek the aid of business law
attorneys especially if he does not fully understand
the procedures.
This is also advisable in forming either a limited
liability company or a corporation. Letting a legal
professional to do such tasks will definitely
prevent business applications from being denied due
to technicalities and insufficient document
preparations.
Being aware of every significant provision about
business law and its corporate aspects is
necessary for a successful business venture and
effective decision in incorporating a business.
Business law attorneys can be very helpful in
these matters.
Article Source: SubmitYourNewArticle.com
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Tax Benefits
of Incorporation
By
Andrew Bimbo
Is it less taxing to incorporate?
Some companies may seem to escape death, but they
will ever be able to escape taxes. That doesn't mean
there aren't some tax benefits out there, though,
that only the corporations are getting. Companies
are tempted to incorporate for a number of reasons,
but more and more often, taxes are the main
motivator. But why?
Well, it's important to note right away that
incorporation only means tax benefits for some
companies. For others, taxes might actually become a
bigger problem than they were before. However,
potentially, you have a lot to gain – in what you
won't be paying in taxes to the government – by
incorporating. There are a few basic tax benefits
that corporations often rely upon.
The first one is tax deferral. All this means,
really, is that a company can keep more of its
earnings. How can this be? When a company becomes a
corporation, it becomes a separate entity of its
owner and thus adheres to different rules than it
did before. Typically, an owner must pay taxes
directly to the government on his or her net income.
But if that same owner has a corporation on his or
her hands, it's an entirely new ballgame. The
corporation has different tax rates than its owner!
Depending on the state, a corporation will have to
pay little to no income tax. You can expect that the
income tax of a corporation will be significantly
lower than a personal income tax.
This may all sound very quaint and appealing, but
there's more to the story. The grass isn't
necessarily greener on the other side because of a
nuisance called double taxation. Double taxation
happens when both the shareholder and the
corporation are taxed for various profits and gains.
Especially when a corporation liquidates, this is a
problem. (As new dividends make themselves known.)
There are ways to resolve the double taxation
dilemma, but it does take quite a bit of thought and
planning.
Whether you're running a company or a corporation,
you must think about taxes in the long term. Don't
just plan for this year and next – think far into
the future and foresee problems like double
taxation. As you consider the tax benefits of
incorporation, make sure to also consider the
disadvantages and added complications. If you want
to get the best bang for your buck when you
incorporate, you must play an active role in the
process of turning your company into a corporation.
And that means you can't take for granted the
promise of tax benefits.
Also keep in mind that tax law is ever-changing and
tax benefits that generations before you had may be
nonexistent today, while new benefits may take their
place. It's advisable to keep up to date about what
your state legislatures are coming up with from year
to year. Because each company has its own
personality and ambitions and of course net profits,
some tax benefits may be more disposable than
others. The only appeal of tax benefits is that a
company retains more of its earnings, so if
incorporation is costing you money in other areas,
you will want to note this. It's important to weigh
all the costs and benefits against each other!
Lawprofessor.com
- General Legal information, 100s of law
articles, organized by topic on most major issues,
law blogs, links, and more.
Article Source:
Free-Articles-Zone.com
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The Pros and Cons of Becoming Incorporated
by
Richard Taylor
So you currently have your own business and you're
pondering over whether or not you should incorporate
it, or carry on as a sole trader?
Before you make the incorporation decision, you need
to consider all of the advantages and disadvantages
that incorporating brings.
This article will lay out and explain all of the
pros and cons that incorporation brings ...
Benefits of Incorporation:
Personal Liability Protection
An incorporated company is a separate legal entity
responsible for its own debts. Shareholders only
have responsibility for servicing debts and
liabilities up to the value of their equity in the
Company.
Creditors of a corporation can only seek payment
from the assets of the incorporated business and not
from the personal assets of shareholders, directors
and officers.
As a small business owner of a non incorporated
company, your personal assets are at risk if your
business fails to service it's debts.
Personal liability protection is therefore a major
benefit of business incorporation.
However, owners forming new corporations with small
amounts of invested capital may well be asked to
provide personal guarantees that credit will be
honoured to reduce the risk of the lender.
Also, owners of incorporated businesses are required
to personally ensure that the company makes its
required tax repayments.
Protection From Legal Action
As with personal liability protection from debts
above, the personal assets of the company's owners
is protected by the separate legal entity status in
cases where the incorporated company faces legal
action.
However, owners can still be held personally liable
in cases where the company is found guilty of
criminal negligence.
Tax Advantages
Some incorporated businesses can enjoy lower
taxation rates following business incorporation
compared with partnerships and sole traders. One
way of achieving lower taxation is to minimise the
salary paid to the owners to reduce higher rates of
personal taxation, and draw income from the business
in the form of dividends which are taxed at a lower
rate.
Obviously professional advice from a qualified
taxation expert should be sought in all instances as
all personal circumstances are different.
Other taxation benefits of incorporation are that
once incorporated, many additional items of
expenditure become tax deductible. For example
medical expenses, entertainment expenses, vehicle
and travel costs, recreational facilities and
pension costs all become tax deductible. This can
be a significant cash benefit. In particular money
placed in an approved pension plan is tax free as is
the funds growth.
Raising New Capital
Once you've incorporated your business, the ability
to issues shares simplifies the process of raising
capital investment. It's also easier to get loans
and other finance approved from financial lending
institutions if you are an incorporated company.
Transferring Ownership
The existence of shares also simplifies the sale of
your business in the future. Also should an owner
or director die, the business can continue to
operate indefinitely.
Business Credibility
Having the words Inc or Corp in your business name
gives a positive perception of long term financial
stability.
Disadvantages of Incorporation
Double Taxation
Once incorporated, earnings are subject to double
taxation, whereby, company profits are taxed, and
then the dividends paid to shareholders from the
"net" profits are also taxed.
With a non-incorporated business, the income the
owner receives from the business is only taxed once.
Double taxation can be avoided if the corporation is
registered as an "S-Corporation"
Statutory Compliance Costs
Compliance with legal and accounting requirements
places a significant burden on companies in terms of
staffing, cost and time. There are also fees
associated with the initial company incorporation,
and ongoing operations.
Loss of flexibility The separate legal entity status
of incorporation also means that the company
finances are separate from the individual's,
therefore the individual cannot "borrow" money from
the accounts of the corporation, and statutory
requirements in general reduce the flexibility of
what can and can't be done with the business and its
finances.
The above are some of the key advantages and
disadvantages that you as a business owner need to
consider before you begin the process of
incorporation. You should always seek legal advice
as all cases are different.
About the Author:
Richard Taylor is an MBA and Company Director with a
particular interest in small business start ups. To
learn more about the ins and outs of business
incorporation, and to get details on how to
incorporate your business,
click here today.
Article Source:
ArticlesBase.com
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Incorporating Small Business Ventures
by
Wayne Hemrick
There are many answers to the question of why
incorporate, but the overall best reason is that, in
general, incorporating your business will protect
your personal assets from the risk of seizure if
your business is sued. When it is time to say,
"Incorporate my business," you may think about
turning to an accountant or a tax adviser, or even a
lawyer. All of these are good solutions to the
problem of incorporating your small business, but
very likely they are out of your small business
price range. Instead, many business owners choose
online incorporation . There are many ways you can
utilize the ease and value of online services to
show you how to incorporate small business ventures
.
When it comes to answering the question of how to
incorporate business , one of the most convenient
solutions for owners are online incorporation
services. Depending on your specific business and
where you wish to conduct that business, you will
find online services that can register your business
in any state in the union, or even internationally.
Therefore, one important business question to answer
is where you wish to conduct business. If it is in
your home state alone, you will pay fewer fees and
have less paperwork to deal with than if you want to
do business in several states. The upside to doing
business in a wider geographical venue is the
opportunity to earn a greater profit from your
work. Some states, such as Nevada and Delaware, are
quite business friendly, and so businesses from out
of state often find an advantage by registering
their business in either of these two states.
You will also need to decide what type of business
entity will work for your small business. You might
choose to form an LLC, or limited liability company,
an S-Corporation, a C-Corporation, or a non-profit
corporation.
When it is time to think about incorporating, small
business owners often start with the LLC format.
This requires less initial paperwork to originate
than other more complex forms of incorporation. You
need no shareholders to form an LLC. If you are
currently working as a sole proprietor, you can
function in the LLC with one person performing all
of the jobs of chairperson, secretary and
treasurer. There are no required shareholder or
board of director meetings and minutes in an LLC.
Other types of recordkeeping is also much less than
might ordinarily be expected with other forms of
incorporation. Your personal assets are separate
from your business assets, and this helps protect
you from getting sued and losing your personal
assets.
When you want to learn how to incorporate, business
principals often turn to online incorporation
services. They can provide appropriate
incorporating small business solutions that will
work well for your specific business needs.
About the Author:
Wayne Hemrick
provides detailed information on how to incorporate
business. With over over a decade of experience,
Wayne offers expert advice on incorporating small
business and helps to answer the question of why
incorporate.
Article Source:
ArticlesBase.com
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Why
Incorporate Your Business?
by
Scott Miller
Entrepreneurs embark on costly
business ventures without first looking into the form of
business that would be most suitable for them given
their business experience and financial capability.
Deciding on what legal form your venture is going to
take will spell the difference when you experience
difficulty in your business later on.
A businessman can choose from
different business forms including sole or single
proprietorship, partnership or a corporation. Each of
these legal forms has their own advantages and
disadvantages and a businessman should be well aware of
their implications on his business venture.
Sole proprietorship is the easiest
business venture to put up because you only have
yourself to disagree with. This means you can go ahead
with whatever plans you have and you can implement them
anytime. It means that when your venture succeeds then
you will reap all the financial rewards of your
business. The sad fact is that this can also be a
disadvantage since it can also mean that you will
shoulder all the losses if the business fails.
A partnership will do well for
business ventures that require more capital and more
skills and expertise. You and your partner can
concentrate on the different aspects of the business
depending on your skills and talents. A partnership form
of business means both you and your partner get to share
your financial earnings and losses. However, there could
be a problem if the business acquires debts because your
creditors can run even after your personal money and not
just after the capital infused into the business.
The most ideal, although
complicated, type of doing business is the corporation.
Incorporating your business would mean bringing in other
people to the business. This would mean no decision can
be reached without the agreement of the majority of the
Board of Directors. The good thing about a corporation
is the availability of vast financial resources for the
business.
A corporation is a distinct legal
entity from its incorporators and shareholders so that
in case the business incurs debts, the share or
stockholders will only answer for the debts depending on
the shares they have in the corporation. This is called
the theory of limited liability. The creditors will no
longer have any right to seek payment from the personal
finances of the stockholders.
A business can start as a sole
proprietorship but the owner can chose to incorporate
the business later as it grows. True, there are more
documentation requirements for incorporating a business
but the advantages of incorporating a business far
outweigh the disadvantages.
The author is a regular contributor
to Inc. Today where additional information about
incorporating your business is available.
Article Source:
NeoArticle.com
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