Corporation

A Corporation is a separate legal entity that can shield the owners from personal liability and company debts. As a separate entity, it can buy real estate, enter into contracts, sue and be sued completely separately from its owners. Also, money can be raised easier via the sale of stock; its ownership can be transferred via the transfer of stock; the duration of the corporation is perpetual (the business can continue regardless of ownership); and the tax advantages can be considerable (i.e. you are able to deduct many business expenses, healthcare programs, etc. that other legal entities are not). Income is reported completely separate via a tax return for the corporation.

A corporation is set up in this structure:

1. Shareholders Own the Stock of the Corporation
2. Shareholders Elect Directors (known as the "Board of Directors")
3. Directors Appoint Officers (President, Secretary, Treasurer, etc.)
4. Officers run the Company (day-to-day operations)

In many cases (especially during the startup phase), you will be the 100% owner of the stock, therefore you elect the directors (usually yourself) and then appoint yourself as an officer (or all the officers: CEO, Treasurer, Secretary).

The rules for operating your Corporation are set in what are called Corporate By-Laws. This document sets the rules for the company and can be modified as the business grows and changes. Our EasyCorp™ service includes a fully personalized set of Corporate By-laws for your State (as well as an editable copy in Microsoft Word format) for you to modify as the company grows and changes.

Operating a Corporation involves at the minimum holding a yearly Directors and Shareholders meeting (the location is determined by you and the expenses are deductible), keeping written Minutes of major company decisions and maintaining general Corporate Compliance as dictated by the Corporate By-laws.

Click here for Frequently Asked Questions about Corporations

PROS: The oldest, most successful and most prestigious type of business entity; provides personal liability protection; conveys permanence, can reduce taxes (lower tax rate on retained profits, items like healthcare, travel and entertainment are deductible).

CONS: More expensive to setup than a Sole Proprietorship or Partnership; more paperwork and formality required than an LLC (holding Shareholder/Board meetings, keeping minutes and resolutions).

The Lowdown: Though more complicated to run and manage than the LLC, the Corporation is still the oldest and most prestigious form of entity.  C Corporations are taxed at a lower rate on profits and are able to deduct items like healthcare, travel, entertainment, etc. that LLC's and S Corporations cannot.  More complicated tax and management issues than an "S Corporation".

How to Get Started: You can start right now.  We can form your Corporation in any of the 50 States and D.C.