TopConsumerReviews.com 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

TopConsumerReviews.com 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

The Bay Club Company Announces Collaboration With Leisure Sports, Inc.

The Bay Club Company ("Bay Club" ), today announced it has agreed to acquire five properties from Leisure Sports, Inc. and enter into a development relationship for future opportunities. This agreement ...

Published:  Tue, 13 Nov 2018 10:00:00 GMT



People in Business: Phillips Insurance Agency, Inc. donates $1,000 to Let's Dance competition to benefit Pathlight

Chicopee - Joe Phillips, President of Phillips Insurance Agency, Inc. delivered a check for $1,000 to Pathlight Board members Mike Moriarty and Jim Foard for their annual let's dance fundraiser. The e...

Published:  Tue, 13 Nov 2018 11:39:00 GMT



MoviePass Parent Company Cancels Stock Split, Nasdaq Delisting Likely

Helios & Matheson Analytics Inc., the parent company of MoviePass, is canceling a stock split that it had hoped would reinvigorate its moribund share price. In a public filing, Helios said it did not ...

Published:  Tue, 13 Nov 2018 13:29:00 GMT



Electro-Sensors, Inc. Announces Third Quarter 2018 Financial Results

Electro-Sensors, Inc. is an industry leading designer and ... Electro-Sensors is proud to be an ISO9001:2015 quality certified company and is committed to providing excellent customer service ...

Published:  Tue, 13 Nov 2018 13:32:00 GMT



2018 CFO of the Year: Neil Lee, Loffler Cos. Inc.

Bloomington-based Loffler Cos. Inc. built its reputation and business helping companies with their copier and fax needs, expanding over time to encompass a wide range of information technology busines...

Published:  Tue, 13 Nov 2018 10:14:00 GMT



AEV Technologies, Inc. Launches New Category of Electric Vehicles

AUSTIN, Texas--(BUSINESS WIRE)--AEV Technologies, Inc., designer and manufacturer of compact, light-duty emissions-free electric vehicles for urban commercial, consumer and government markets, announc...

Published:  Tue, 13 Nov 2018 09:58:00 GMT



Why Teaming Up on Small Business Saturday May Be the Best Way to Get Customers Through the Door

Many small and independent retailers who are holding Small Business Saturday shopping events Thanksgiving weekend are banding together with others, believing that there's strength in numbers. Small Bu...

Published:  Tue, 13 Nov 2018 11:10:00 GMT



Influential Family-Owned Businesses in Los Angeles: New York Food Company, Inc.

NEW YORK FOOD COMPANY, INC. Since its beginning as a small storefront deli in 1979, New York Food Company has evolved to become Southern California's leading full service catering and special ...

Published:  Tue, 13 Nov 2018 10:28:00 GMT



Sears customers could soon be taking their business to Home Depot

Nearly two-thirds (62%) of Sears Holding Corp. customers say they'd consider a move to Home Depot Inc. for appliances ... said the research company. "Looking ahead, we believe that Home Depot will be ...

Published:  Tue, 13 Nov 2018 12:07:00 GMT




- View Full Site -