| A corporation is a separate and distinct legal entity | | | | Board of Directors. The Board of Directors hires |
| created under the laws of a state. The individuals who | | | | officers. The officers usually are CEO and/or |
| are part of the legal entity consist of shareholders, | | | | president, vice president, treasurer, and a secretary. If |
| board of directors, and officers. A corporation can | | | | the corporation is large, there may also be a Chief |
| legally enter into contracts, file lawsuits, be a defendant | | | | Financial Officer, a Chief Human Resources Officer, |
| in a lawsuit, pay taxes, and conduct its business. You | | | | and other management officers. All officers are |
| should consult a legal profession before you decide | | | | required to follow the standards and policies set by the |
| whether or not to incorporate your business. The | | | | Board of Directors. The officers manage the daily |
| following are some of the advantages of operating | | | | operations of the corporation. |
| your business as a corporation: | | | | Easy to Attract Investors. The corporation can sell its |
| Limited Liability. This is one of the most important | | | | stock to investors which gives them an ownership |
| reasons to form a corporation. Because a corporation | | | | interest in the corporation and makes it more attractive |
| is considered a separate legal entity, the shareholders' | | | | to investors. |
| personal assets are not at risk for satisfying corporate | | | | Uninterrupted Existence. A corporation still exists even |
| obligations. | | | | if the shareholders, the Board, and the officers leave |
| Corporate Tax Treatment. A corporation pays taxes | | | | the business. |
| separately from its shareholders at the corporate rate. | | | | Transferable Shares. Corporate stock can generally |
| The shareholders pay personal income taxes on | | | | be freely bought and sold, because the corporation is |
| payments they receive from the corporation in salaries, | | | | not affected by who the shareholders are. If |
| bonuses, and dividends. | | | | shareholders die or sell their stock, the corporation |
| Stock Incentives. Corporations can offer stock options | | | | continues to exist and is unchanged. Of course, the |
| or stock to their employees as an employee benefit | | | | transfer of stock may be regulated or restricted by |
| that can make employees more loyal to the company. | | | | federal or state securities laws. |
| Employee Benefits. A stockholder who is also an | | | | For more information about these and other important |
| employee of the corporation may be eligible for | | | | business topics and for legal consultation, please visit |
| reimbursement or a tax deduction for health and life | | | | our website at |
| insurance, travel, and other expenses. | | | | The future of your business starts here. |
| Structure. Corporations consist of shareholders who | | | | Copyright 2006 Indigo Business Solutions. All rights |
| are the owners of a corporation, and they elect the | | | | reserved. |