is a world-leading consumer product review site. We provide detailed reviews and ratings for thousands of products and services.


Go To Reviews >

Which Type of Company Incorporation is Right for You?

Maybe when you first started out, a partnership or sole proprietorship was ideal. Your business was small, your exposure to legal liability may have been low because most of your clients or customers came to you via referrals from friends and family. But an organization's growth can mean both opportunity --- and potential headaches.

Your firm having survived its infancy, it might now be time to branch out to doing business in other states. You might have more employees and wish to offer them benefits while taking advantage of a tax deduction. Offering benefits might even result in attracting better quality employees. You might even want to raise capital by means other than personal assets or business loans. For these and other reasons, incorporating your business can be a good choice.

Once you've decided that you want to incorporate, you still have at least one more question to answer: "Which type of company incorporation is right for you?"

As an owner, you have two types of corporate structure to choose from. The C-corporation is what most folks think of when they think of incorporating. A C-corporation must accomplish a list of administrative steps to establish and maintain its status, among them the filing of a number of IRS tax documents throughout the calendar year. An S-corporation must take the same set of administrative steps but does not have to file a corporate tax return. Instead, S-corp owners report any profits or losses on their personal tax returns.

With both C-corp and S-corp structures, you establish your company as a tax and legal entity separate from you and any other owners. Creating this entity acts to protect you from liability in the event that you are sued or your company goes into debt.

Whether you select S-corp or C-corp status, incorporating your business requires the completion of a good deal of documentation that must be filed according to somewhat strict procedures. To make things even more complicated, each state sets its own rules relative to incorporation procedures. Hiring a lawyer who is familiar with your state's rules, as well as with federal statutes and provisions, is advisable. Consulting with a business tax professional before starting the process is also a good idea.

To begin the incorporation process, you must file articles of incorporation with your state's Secretary of State. In addition, you have to craft and record a set of company by-laws. By-laws do not need to be filed with any official body, but must be kept with company files. Next, you have to schedule -- at least once per year -- shareholder and board of directors meetings. When meetings are held, minutes must be recorded and kept on file. Establishing a business name with state and/or local authorities, complying with licensing regulations and obtaining a federal tax ID number are also part of the process.

If you choose the S-Corp route, you need to be sure your company meets IRS requirements for "Subchapter S" status. These requirements are routinely updated, so checking in with a tax professional is encouraged. If you do indeed qualify, you must have your shareholders vote to approve S-corp status. Once you have established S-corp status, you'll be able to sidestep the liability concerns of a sole proprietorship or partnership, as well as the cumbersome tax filing requirements of a C-corporation.

Each incorporation choice boasts its own positives and negatives. When it comes to choosing between the two, your business objectives -- tempered with sound legal and tax advice -- should inform the process.

Go To Reviews >

Top Consumer Reviews Articles provides unique articles that you won't find anywhere else on the internet. These articles are designed to help you make the most informed decisions possible.

Company Incorporation In The News

Nutrisystem, Inc. Launches Groundbreaking DNA Body Blueprintâ„¢ Nationwide

Nutrisystem, Inc. (Nasdaq: NTRI), a leading provider of health and ... nutrition and metabolism. (Photo: Business Wire) "By providing a personalized overview that is the ultimate roadmap for an indivi...

Published:  Mon, 16 Jul 2018 06:01:00 GMT

Alliance One International, Inc. Proposes Change in Corporate Name to Pyxus International, Inc.

Inc., at the company's Annual Meeting of Shareholders to be held on August 16, 2018. On February 8, 2018, the company announced an ambitious transformation plan, called "One Tomorrow," intended to dri...

Published:  Mon, 16 Jul 2018 05:28:00 GMT

Transcontinental Realty Investors Inc. and Abode Properties Commences Formal Leasing Activity at Abode Red Rock Apartments in Las Vegas, Nevada

DALLAS--(BUSINESS WIRE)--Transcontinental Realty Investors, Inc. (NYSE: TCI) and Abode Properties announced today that the Abode at Red Rock apartments in Las Vegas, Nevada will be open and accepting ...

Published:  Mon, 16 Jul 2018 07:00:00 GMT

Changing Channels: Buckingham Turns Bearish On Netflix Ahead Of Q2 Print

Netflix, Inc. (NASDAQ: NFLX) investors should hold a bearish stance on the stock ahead of the company's second-quarter earnings report after Monday's market close, according to Buckingham Research Gro...

Published:  Mon, 16 Jul 2018 06:08:00 GMT

Farmland Partners Inc.: Farmland Partners Inc. Reports Farm Sales, Further Boosts Liquidity

DENVER, July 16, 2018 /PRNewswire/ - Farmland Partners Inc. (NYSE: FPI) (the 'Company') has announced that it has sold five farms comprising 1,245 acres for total gross proceeds of $9.2 million. Four ...

Published:  Mon, 16 Jul 2018 06:45:00 GMT

DigitalTown, Inc. joins Geekdom to bring Blockchain platform to San AntonioCo-Creating Quality of Life. Locally. Globally.

CEO of Geekdom member company Inselberge Inc., Carl "Tex" Morgan, adds: "The Geekdom community is perfectly positioned to pioneer the adoption of powered by DigitalTown and I am excite...

Published:  Mon, 16 Jul 2018 06:39:00 GMT

- View Full Site -