Easy Questions  
Free Legal Documents

Guide to Incorporating your Business in Altamahaw, NC

Guide to Incorporating your Business in Altamahaw, NC


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 NC 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 NC 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 Altamahaw, NC
US Probation & Parole Office
101 Government Ave SW
Hickory, NC 28602
(828) 327-9945
Criminal Law Attorneys, Attorneys
Smith Timothy D
725 E Trade St # 210
Charlotte, NC 28202
(704) 334-9909
Criminal Law Attorneys, Attorneys, General Practice Attorneys
Cordell & Cordell - Charlotte
521 East Morehead Street, #350
Charlotte, NC 28202
(704) 972-9901
Attorneys, Family Law Attorneys, Divorce Attorneys, Divorce Assistance, Child Custody Attorneys
Family Law Associates
428 E 4th St
Charlotte, NC 28202
(704) 333-9900
Attorneys, Divorce Attorneys, Family Law Attorneys
Holliday, Katherine S
600 S College St
Charlotte, NC 28202
(704) 372-9870
Attorneys
James McElroy & Diehl PA
600 S College St Suite 3000
Charlotte, NC 28202
(704) 372-9870
Attorneys,  Business Law Attorneys,  Real Estate Attorneys,  Legal Service Plans
Lord Harrison A
600 S College St
Charlotte, NC 28202
(704) 372-9870
Criminal Law Attorneys, Attorneys
O'Connor Law Firm, PLLC
201 South Tryon St.
Charlotte, NC 28202
(704) 438-9845
Real Estate Attorneys, Attorneys, General Practice Attorneys
Barbara, L White
500 E Morehead St
Charlotte, NC 28202
(704) 375-9777
Attorneys, Bankruptcy Law Attorneys, Legal Service Plans
Asbill Stiles
402 W Trade St
Charlotte, NC 28202
(704) 926-9250
Corporation & Partnership Law Attorneys, Attorneys, Labor & Employment Law Attorneys, Accident & Pro
Icard & Stading,
524 West 10th Street
Charlotte, NC 28202
(704) 377-9229
Criminal Law Attorneys, Traffic Law Attorneys
Kessler, Kristi E
401 S Tryon St
Charlotte, NC 28202
(704) 372-9000
Attorneys
Parker Poe Adams & Bernstein LLP
401 S Tryonsuite 3000 Street
Charlotte, NC 28202
(704) 372-9000
Legal Service Plans,  Bankruptcy Services,  Bankruptcy Law Attorneys,  Business Litigation Attorneys
Farmer, Woodard E Jr
401 S Tryon St
Charlotte, NC 28202
(704) 372-9000
Attorneys
Mc Guire Woods Llp
100 N Tryon St
Charlotte, NC 28202
(704) 373-8999
Attorneys,  Criminal Law Attorneys,  General Practice Attorneys,  Banking & Mortgage Law Attorneys,
Longo Aaron James
201 N Tryon St # 3000
Charlotte, NC 28202
(704) 373-8958
Attorneys
Fennebresque & Co
100 N Tryon St # 2710
Charlotte, NC 28202
(704) 295-8900
General Practice Attorneys, Attorneys
Ross & Hoel PA
725 E Trade St # 125
Charlotte, NC 28202
(704) 377-8897
Criminal Law Attorneys, Attorneys, Legal Service Plans
Danchi, Theodore S
510 W Williams St
Apex, NC 27502
(919) 362-8873
Attorneys, Legal Service Plans
Carrigan, Mary V
435 E Morehead St
Charlotte, NC 28202
(704) 333-8855
Family Law Attorneys,  Attorneys,  Child Custody Attorneys,  Divorce Attorneys
Inglefield Rebecca A
220 18th Street Cir SE
Hickory, NC 28602
(828) 324-8845
Securities & Investment Law Attorneys, Attorneys, Legal Service Plans
David A Concha Law Office
725 E Trade St # 215
Charlotte, NC 28202
(704) 525-8824
Immigration Law Attorneys,  Attorneys,  Criminal Law Attorneys,  General Practice Attorneys,  Legal
Oxbridge Law Firm
129 W Trade St
Charlotte, NC 28202
(704) 817-8774
Immigration Law Attorneys, Attorneys
Butler Norman
725 E Trade St
Charlotte, NC 28202
(704) 335-8686
Criminal Law Attorneys, Attorneys
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US