| A Corporation is also referred to as a standard | | | | as it sounds, though. If you are working for your |
| corporation. It is also called a C-Corporation or a | | | | corporation you should be paid a salary. This salary is |
| Regular Corporation. A Corporation is a legal form of | | | | deducted from the income of the corporation before |
| organization of persons and material resources, | | | | taxes, so it will only be taxed once. Depending on the |
| chartered by the state, for the purpose of conducting | | | | business, salaries may use up most or all of the profit. |
| business and may have an unlimited number of | | | | As long as the salary is not unreasonably high, the IRS |
| shareholders, which may include shareholders who are | | | | should not challenge it. Fringe benefits for employees |
| foreign citizens. A Corporation may be public - one in | | | | such as health insurance may also be deducted by a |
| which shares is offered for sale to the public or | | | | C-Corporation, but not by an S-Corporation. For a |
| privately held - one in which shares is not sold to the | | | | profitable and growing company it may be better to be |
| public. Usually shares are held by the founders, by | | | | a C-Corporation. In a C-Corporation profits beyond |
| board members and by private investors, such as | | | | salaries and other deductible expenses can be used |
| venture capitalists, who may or may not sit on the | | | | by the company for growth rather than being |
| board of directors. | | | | distributed to the shareholders and creating taxable |
| Shareholders are protected from the corporation's | | | | income for them. |
| liabilities. "Double taxation" frequently occurs, because | | | | An S-Corporation does not have the double level of |
| the corporation is taxed on its profits, and shareholders | | | | taxation, corporate and individual, that a C-Corporation |
| are also taxed on the distributions they receive, such | | | | has. Instead, profits and losses are distributed among |
| as profit sharing payments or dividends | | | | shareholders who report that income or loss on their |
| The most common type of incorporation is the C | | | | own federal income taxes. This is the main advantage |
| Corporation, which is a for-profit, state-incorporated | | | | to electing S-Corporation status. |
| business. A company registration is done with state | | | | |
| authorities and must abide by corporate laws in the | | | | |
| state where it is incorporated. | | | | Where To Incorporate? |
| To incorporate or register company, you will need to | | | | |
| register your business name, file a certificate of | | | | First considerations after a new business decides to |
| incorporation or articles of incorporation and pay a fee. | | | | incorporate is where to incorporate. For most |
| You will also need to draft corporate bylaws and hold | | | | businesses, incorporate in the state where the |
| a board of director's meeting. | | | | corporation will do most of its business. This rule holds |
| Types of Corporation | | | | especially true for smaller businesses that will likely not |
| a) C-Corporationb) S-Corporation | | | | expand significantly, or that do not want to conducting |
| | | | | business outside of their home state. So, incorporating |
| Corporate, Corporation, C Corporation, C-Corporation, | | | | in your business's home state is usually the safest to |
| Double taxation | | | | start your new business. Then if, after your corporation |
| | | | | has been up and running for some time, it appears that |
| C-Corporation VS S-Corporation VS LLC | | | | you may need to conduct business in another state, |
| | | | | you can always register in another state as a foreign |
| If you're incorporating your small business you may | | | | corporation also known as "Foreign Entity" |
| have heard that you should "form corporation" or | | | | Each state has its own legal requirements and |
| "C-Corporation." | | | | registration procedures for new businesses wishing to |
| In a C-Corporation, the corporation pays income tax on | | | | incorporate. Certain states are well known as |
| profits of the corporation. If the corporation pays a | | | | favorable homes for corporations or forming an LLC, |
| dividend to the shareholders, this money is taxed again | | | | due to their unique incorporation laws and favorable |
| as income to the shareholders. It may not be as bad | | | | tax policies. |