Easy Questions  
Free Legal Documents

Guide to Incorporating your Business in Adkins, TX

Guide to Incorporating your Business in Adkins, TX


The great corporations of this country were not founded by ordinary people. They were founded by people with extraordinary intelligence, ambition, and aggressiveness.
 
- Daniel Patrick Moynihan


What is a Corporation?
A corporation refers to a group of people authorized to operate as a single entity. It is managed by a board of directors who administer its general affairs. Corporations are capable of owning a property and do business. It can also open a bank account under its own name.

Forming a Corporation

For a corporation to exist, "Articles of Incorporation" are filed with the Secretary of State. In some states, this document is known as "Certificate of Incorporation" or "Certificate of Formation."

Different Types of Corporations

The main difference relates to the two ways an IRS allows a corporation to be taxed: "C Corporation" and "S Corporation."

C Corporation

In a "C Corporation" corporate income (1st tax) is the source of its corporate tax. Then it will distribute the profits of the corporation to its shareholders who are liable to pay taxes out of those dividends (2nd tax). This is referred as double taxation because the C Corporation is taxed on two levels.

S Corporation

A corporation that elects to be treated as a pass-through entity is referred to as an "S corporation." All corporate income is "passed-through" to the shareholders directly, who in turn list the income on their individual tax returns. An "S Corporation" is not subject to double taxation and its accounting is easier than a "C Corporation."

Benefits of Forming a Corporation

A corporation can help reduce your taxes. It can also protect your assets. It can also shield you from liability for losses of a business. Without the corporate veil, you would have to pay the debts of the businesses you owned out of your personal assets. In a corporation, however, you are shielded from this liability, so more people are willing to invest in this type of business venture. Presently, corporations have become the standard for many business entities.

Tax Advantages of Corporations Income Shifting

A "C Corporation" even with its double taxation, can still offer tax flexibility because of income shifting. You can use income shifting to take advantage of lower income brackets. For example, raising or lowering the owner's salary can shift income from the "C Corporation" to the owner giving the owner flexibility to choose the ideal tax bracket for the corporate entity and for personal taxes.

Sole Proprietorship and Partnership

Corporations have a lot of advantages and only some disadvantages over partnerships and sole proprietorships.

Advantages:

• Corporate shareholders are not liable for corporate debts.

• Corporations offer self-employment tax savings

• Corporations have continuous life

• Corporations make raising money easier

• Transferring the ownership interests of a corporation is easier

Disadvantages:

• Sole proprietorship and partnership cost less to establish

• Minimal formalities required for sole proprietorship and partnership

• Sole proprietorship and partnership are not accountable for unemployment insurance

Corporation vs. a Limited Liability Company

Limited liability company (LLC) combines the simplicity of a partnership and personal liability protection of a corporation with the tax benefits.

Advantages of a corporation over LLC:

• Corporation profits are not subject to Social Security and Medicare taxes

• Corporations garner greater acceptance

• Corporations can offer a greater variety of fringe benefits with fewer taxes

• Corporations lower taxes through income shifting

Advantages of LLC over a corporation:

• LLCs have fewer corporate formalities

• LLCs have no ownership restrictions

• LLCs have the ability to deduct operating losses

• LLCs have tax flexibility

Choosing a State for Incorporation

Most people want to establish business in their home state. It would be practical to check if your home state has a high corporate tax or high state fee. You can do business elsewhere if that is the case in your chosen state. Business involves more than just selling products; it requires having active presence and or occupying an office.

Procedures for Forming a Corporation in a Particular State

Most states have the same basic process for incorporating. Variations will be on state filling fees, bylaws, continuing obligations, and formation requirements.

Foreign Corporations

A Foreign corporation refers to the registration of a corporation in each state where they do business outside of their state of incorporation. This process is called foreign Qualification.

Managing the Corporation

Approving major business decisions are done by the board of directors who manages the corporation. Directors are elected by the shareholders and hold office for a limited term. Here must be at least one director in a corporation. Some of the procedures approved by the board of directors include:

• Declaration of dividends

• Setting the terms of employment of the elected officers

• Amending the articles of corporation and bylaws

• Corporate transactions involving mergers and reorganizations

Owners of a Corporation

The ultimate owners of the corporation are the shareholders or stockholders. They don't have the right to direct the daily activities of the corporation yet they have the right to share the profits of the corporation, elect directors, and vote on major corporate actions.

In order to elect directors, a corporation is required to hold annual shareholders' meeting. If not all shareholders are present, the meeting can still go on through a conference call or by letting shareholders signed the approved actions as discussed during the meeting.


Corporate Stock

Corporate stocks have two levels, the common stock and the preferred stock. Common stock is the most basic level of stock and it is the ownerships' share in a corporation accompanied by the rights to vote on corporate policy and management. It is the usually the only kind of stock with the voting rights.

Shareholders and Directors for a Corporation

To run the company, a corporation should have at least one director and one shareholder.

Appointing Corporate Officers

Corporations have at least three officers: a president, a treasurer or financial officer and a secretary. These officers are appointed by the board of directors to run the day-to-day operations of the corporation. They don't have to be shareholders or directors; in most cases the same person can hold all offices.

Required Officers for a Corporation

A corporation must have a president, secretary and treasurer in most states. In most cases, one person can hold all three offices.

How Corporations are Taxed

A corporation, being a separate legal entity, submits their tax return each year with the IRS. If the corporations' fiscal year ends in December 31, tax returns are due on Mach 15. Tax return must be filed even if it does not have a tax due or income. C corporations file their tax returns using the Form 1120 or 1120A. S corporation are not required to pay federal taxes at corporate level but they still must prepared a separate tax return using Form 1120S.
 
Personalize & Print a Free TX Last Will Download this Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
 
Personalize & Print a Free TX Living Will Download this Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Related Legal Services near Adkins, TX
Granger & Mueller
605 W 10th St
Austin, TX 78701
(512) 474-9999
Attorneys, Criminal Law Attorneys
Mahler, Rick L.
719 Scott Ave Suite 616
Wichita Falls, TX 76301
(940) 723-9999
Attorneys,  Criminal Law Attorneys,  DUI & DWI Attorneys,  Family Law Attorneys,  Divorce Attorneys
The Dashner Law Firm
929 E Esperanza Ave # 25
McAllen, TX 78501
(956) 683-9997
General Practice Attorneys, Attorneys, Legal Service Plans
Greenway John W
400 W 15th St
Austin, TX 78701
(512) 452-9996
Attorneys
Stephen J Davis
701 Brazos St
Austin, TX 78701
(512) 479-9995
General Practice Attorneys, Attorneys, Legal Service Plans
Flores Romeo M
555 N Carancahua St Ste 1200
Corpus Christi, TX 78401
(361) 881-9990
Arbitration Services,  Attorneys,  Mediation Services,  Legal Service Plans
Dettman, Mark H
415 W Wall St
Midland, TX 79701
(432) 683-9990
Estate Planning, Probate, & Living Trusts,  Attorneys,  Investment Advisory Service,  Financial Se
Nelson Susan I
215 Mary Ave # 310
Waco, TX 76701
(254) 754-9990
General Practice Attorneys, Attorneys, Legal Service Plans
Carr Emily Ann
407 E 4th St
Tyler, TX 75701
(903) 533-9986
Attorneys
Sheets Jeff
1213 Avenue K
Lubbock, TX 79401
(806) 771-9985
General Practice Attorneys, Attorneys, Legal Service Plans
Scott, Roy
407 N Big Spring St Ste 200
Midland, TX 79701
(432) 570-9979
Attorneys, General Practice Attorneys, Legal Service Plans
Vincent Gonzalez
606 N Carancahua St Suite 506
Corpus Christi, TX 78401
(361) 883-9966
Attorneys,  Legal Service Plans,  Drug Charges Attorneys,  Criminal Law Attorneys,  Federal Law Atto
Williams Allan L
1100 West Ave
Austin, TX 78701
(512) 477-9959
General Practice Attorneys, Attorneys
Forsythe Andrew J
1100 West Ave
Austin, TX 78701
(512) 477-9959
Attorneys, Legal Service Plans
Stern Rebecca L
316 W 12th St, Ste. 402
Austin, TX 78701
(512) 481-9950
Attorneys,  Family Law Attorneys,  Estate Planning, Probate, & Living Trusts,  Arbitration & Media
Schmidt Michael B
555 N Carancahua St # 1550
Corpus Christi, TX 78401
(361) 884-9949
Attorneys,  General Practice Attorneys,  Legal Service Plans,  Bankruptcy Law Attorneys
Minna Lynn
3102 Maple Ave # 220
Dallas, TX 75201
(214) 528-9948
General Practice Attorneys, Attorneys
Dan Shelley
305 W 13th St
Austin, TX 78701
(512) 478-9937
General Practice Attorneys, Attorneys
Strauss Lisa
4545 Bissonnet St
Bellaire, TX 77401
(713) 449-9922
Attorneys, DUI & DWI Attorneys, Legal Service Plans, Traffic Law Attorneys
Vier Chad
207 E Frank Ave # 100
Lufkin, TX 75901
(936) 632-9922
Accident & Property Damage Attorneys, Attorneys, Legal Service Plans
CASTILLO DAMIAN - ATTORNEY
407 N Big Spring St
Midland, TX 79701
(432) 570-9919
Attorneys
Bradley David
500 S Taylor St Suite 900
Amarillo, TX 79101
(806) 376-9914
Attorneys
Spencer Jamie
812 San Antonio St
Austin, TX 78701
(512) 472-9909
Attorneys
Roberto Puente
602 N McColl Rd
McAllen, TX 78501
(956) 618-9904
Attorneys, General Practice Attorneys, Legal Service Plans, Immigration & Naturalization Consultants
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US