Starting your business? Our incorporation professionals got you covered!
Looking out to starting your business? Our incorporation professionals got you covered! Whether you decide to open a new business, create a corporation, LLC, Partnership or Sole Proprietorship, or simply filing a DBA, our business filing experts can assist you with all the paperwork, quickly and affordably as a start-up business.
What is a C corporation?
A corporation C is a legal body for a corporation in which the owners, or shareholders, are taxed independently from the entity. C corporations, the most common of corporations, are also subject to corporate revenue taxation.
What type of businesses should register as a corporation?
Whoever needs a formal business structure with flexible title as a business owner, chooses C corporation option, because C Corporations permit the buying of stock not only by individuals, but also by foreigners, organizations, domestic or corporate body. This aspect of the corporation makes them an appealing choice for businesses that want to raise capital or gain the attention of those who are likely to buy or invest.
Corporations tend to last longer, as long as they are correctly sustained to meet their commitment. So, unlike other entity types, the essence of the business is not directly tied to the owners of the business.
In what ways does corporation protect business owners?
The formation of a C corporation creates a business as its own legal entity, separate from the owners of the business. This separate your individual assets such as your vehicles, home, or other holdings from being claimed by creditors to pay debts accumulated by the business. A properly formed C Corporation safeguards its owners from this burden. For instance, if under unlucky situation your business should face a legal action; the valuables of the corporation would be aimed at, not the valuables of the owners. C corporations also retain their own credit rating, different from that of the owners. Your personal credit would remain intact should the business go into bankruptcy in the event of loan default or other related issues. An owner’s less than perfect credit score will have no bearing on the credit of the business as it also works the other way round.
What are the tax benefits of forming a corporation?
The possible tax benefits of filing a corporation, much like any other entity type, are based exclusively on the structure and monetary details of the business itself. Corporations permits benefits like retirement plan and medical insurance for employees, but are also subject to “dual taxation”, where earning is taxed at both the corporate and personal level.
Losses are also fully deductible for a corporation, and a corporation’s profits can be left in the business for further growth of the business. These benefits don’t always override the potential downside for a business, so it is a good decision to engage the services of a professional about the best entity type relative to your business objectives.
What are the maintenance requirements of a corporation?
Corporations are required to comply with yearly corporate protocol, with the inclusion of providing notice of yearly meetings to the directors and shareholders, filing a Statement of Information with the Secretary of State, holding yearly meetings, and the documentation of those meetings with corporate minutes. Each state has its own set of requirements and deadlines to consider, and meeting those deadlines is a requirement in order to prevent your business from falling out of good standing. Businesses who fail to stay in good standing can file a reinstatement once their requirements have been met, but they are at risk of losing the liability protection provided by the corporation in the meantime. At JoseTaxes, we can assist you complete your annual requirements.
Are you prepared to start your business as a corporation? Our professional experts can help you set up for a very affordable fee.