This excellent article will help you understand how to go
about incorporating your company.
Incorporating Your Business Using Three Simple Steps
By
Abe Cherian
Incorporating your business today is much easier than it was
10 or even 20 years ago. Here's three steps; securing your corporate name,
filing the necessary documentation and paying the necessary filing fees. You can
complete these steps yourself, use an incorporation service provider or have an
attorney complete them for you.
When incorporating, you must first ensure that your corporate
name is available in the state in which you want to incorporate. Your corporate
name must not be deceptively similar to a name that is already in use in that
state. A name check must be performed in the state of incorporation.
You must also prepare and file all the necessary documentation. the Articles
of Incorporation, with the appropriate state agency in the state of
incorporation.
Additionally, you must pay all state filing fees, initial franchise taxes and
any other initial fees. Each state charges a filing fee to form your corporation
in that state. These state filing fees vary greatly by state. They range from
under $100 to over $400.
Do It Yourself. Use An Incorporation Service Provider Or Use An Attorney. If
you decide to incorporate on your own, you need to be well versed in the laws of
the state of incorporation. You will need to prepare and file your own
documentation and undertake all communications with the necessary state
agencies.
If you use an incorporation service company, you submit the necessary
information, and the company checks your name, prepares and files your documents
and pays the initial state filing fees on your behalf.
Incorporation service companies charge a nominal service fee on top of the
state filing fees, and you can submit all the necessary information to them over
the Internet. Attorneys will also undertake all of the necessary steps for you.
If you use an attorney to incorporate, you can expect to pay their hourly fee on
top of the state filing fees.
How long this will take depends on the time the state requires to approve and
return your completed Articles of Incorporation varies by state. On average, it
takes 4-6 weeks to become incorporated.
Most states will allow you to expedite the filing process for an additional
charge. Expediting filings typically take about 1 week. Those charges also vary
by state.
After your corporation is formed, an organizational meeting of directors must
be held. At this meeting bylaws are adopted, stock is issued and the
incorporation process is completed. Minutes of the organizational meeting should
be kept in a corporate record book.
Incorporation is an important step in the life of a business, but
unfortunately the true value of incorporating a business is often not seen until
the business faces a negative situation such as a law suit or bankruptcy. A
primary advantage of incorporation is the limited liability the corporate entity
affords its shareholders "The Owners".
Typically, shareholders are not liable for the debts and obligations of the
corporation. Creditors will not come knocking at the door of a shareholder to
pay debts of the corporation. In a partnership or sole proprietorship the
owner's personal assets may be used to pay debts of the business.
Other Advantages include
¤ A corporation's life is not dependent upon its members. A corporation
possesses the feature of unlimited life. If an owner dies or wishes to sell
their interest the corporation will continue to exist and do business.
¤ Retirement funds and qualified retirement plans "like 401k" may be set up
more easily with a corporation.
¤ Ownership of a corporation is easily transferable.
¤ Capital can be raised more easily through the sale of stock.
¤ A corporation possesses centralized management.
Corporations are not without disadvantages. The primary disadvantage to a
corporation is double taxation. Profits of a corporation are taxed twice when
the profits are distributed to shareholders as dividends. They are taxed first
as income to the corporation, then as income to the shareholder.
All reasonable business expenses such as salaries are deductions against
corporate income and can minimize the double tax. Further, the double tax can be
eliminated by making the S corporation election with the Internal Revenue
Service.
Other Disadvantages Include
¤ There is a certain level of complexity and expense of forming a
corporation.
¤ Corporations have extensive record keeping requirements.
¤ Operating a corporation across state lines requires the corporation to
qualify to do business in the other state.
Both the Limited Liability Company "LLC" and "S" corporation also provide the
limited liability to the owners/shareholders of the company, without the
potential disadvantage of double taxation. While like corporations these two
entities also have advantages and disadvantages, it is a good idea to learn
about all three when deciding what form your business should take.
You may publish this article in your ezine, newsletter on your web site as
long as the byline is included and the article is included in it's entirety. I
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Please send a courtesy link or email where you publish to: support@multiplestreammktg.com
-------------------------------
Copyright © 2005
Abe Cherian is the founder of Multiple Stream Media, a leading
performance-based Internet advertising company dedicated in helping small
businesses create online presence, brand recognition and online automation. Main
company web site:
http://www.multiplestreammktg.com
Abe Cherian's online automation system has helped thousands of marketers
online build, manage and grow their business. Learn how it can benefit you too.
Article Source: http://EzineArticles.com/
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