| Choosing a right structure of new company is a vital | | | | - Check with the State that your proposed business |
| decision that needs detailed analysis of pros and cons | | | | name is available. |
| of each available option in terms of your current and | | | | - Register your business name and fictitious name for |
| future business needs. Before we start working on | | | | DBA purpose. |
| forming a new corporation, let us have a quick glance | | | | - Register your business as Foreign Corporation in all |
| on pros and cons of Corporation. | | | | other States where you plan to operate. |
| Pros: The owner has limited legal liability. Corporate | | | | - Decide corporate structure for your Corporation. |
| structure attracts more investors and that offers | | | | Generally this structure has three main categories: |
| effective capital management options. Under the | | | | Board of Directors, Corporate Officers, and |
| corporate structure, each group has clearly defined | | | | Shareholders. Chief Executive Officer, Chief Financial |
| role and responsibility. With income splitting, you can | | | | Officer, Chief Operating Officer, and Secretary are the |
| reduce the overall income tax by taking advantage of | | | | best examples of Corporate Officers. The roles and |
| lower corporate tax rates. On the first $75,000 of the | | | | responsibilities of these groups also need to be clearly |
| corporate income, the corporate tax rates are typically | | | | defined through various legal documents. |
| lower than the owner's personal income tax rates. | | | | - Prepare, sign, and file your Corporation's Articles of |
| Cons: Compared to other options, forming a | | | | Incorporation. Generally this contains some basic |
| corporation is expensive and time consuming process. | | | | information of your Corporation like name and address, |
| All corporate formalities need to be observed in totality | | | | corporate purpose (business activity), name and |
| that means you have to be very organized at all times. | | | | address of Registered Agent, Stock information like |
| Under the traditional corporations you have the | | | | number of authorized shares, type & class of |
| disadvantage of double taxation - meaning the | | | | shares, and value of each share etc. You need to pay |
| corporation pays taxes on its profits and stock holders | | | | filing fees to the State when you file your Articles of |
| also pay taxes on dividends. You can of course | | | | Incorporation. |
| eliminate double taxation with S Corp option. | | | | - Prepare Corporate By-Laws for your record. You |
| Now if you have decided that Corporation is the right | | | | don't have to file this with State. |
| choice for you, let us talk about how to form a | | | | - Prepare Shareholders Agreement to manage future |
| corporation. You can form a traditional Corporation or | | | | issues related to buy-out or buy-sell situation. |
| Sub Chapter S Corporation. Pros and cons of these | | | | - Elect "S" Corp tax status if necessary. |
| options need careful review and consideration. In many | | | | - Hold first meeting of Board of Directors and start |
| States, people who are in the occupation of doctors, | | | | maintaining minute book. |
| lawyers, or accountants can incorporate their practice | | | | - Issue Stock Certificates to stock holders. |
| only through a Professional Corporation. | | | | - Obtain business license and permits for your |
| Here are the steps to form a Corporation: | | | | Corporation from Federal, State, and Local agencies. |
| - Choose your business name according to State | | | | - Make sure to follow all legal requirements to run your |
| rules. Some States need you to include word like | | | | Corporation. |
| Incorporated or Corporation at the end of your | | | | You might want to check our quality start-up services. |
| business name. Please try to choose a name that has | | | | We encourage you to visit our website to learn more |
| some kind of relevance with the nature of your | | | | about how to incorporate your business. |
| business. This helps marketing later on. | | | | |