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Dissolution of business could be for variety of reasons for example: bankruptcy, retirement, or a change in career direction. When a business entity is no longer doing business or even if it was never used for anything, it is very important that it follows the legal steps in "winding itself up" as a legal entity. A business Corporation, S Corporation or an LLC is an entity created under authority granted by the state. Its existence may only be terminated by the state. The Business Law provides a procedure for dissolving a corporation or an LLC. All legal entities can only be dissolved through formal action, not by a letter or phone call. You remain liable for all taxes, assessments, fines, penalties...

An S corporation is a type of corporation that the IRS recognizes. S corporations follow taxation rules that differ from those that regular corporations follow. A main difference is that S corporations are exempt from double taxation. This is because the owner declares the income a corporation receives in individual tax returns. Corporations are not subjected to taxation of the income. The taxation rules follow those of sole proprietorship and partnership businesses. However, they enjoy the limited liability (protection) corporations receive. To apply for an S corporation status, you need to incorporate your business. To do this, you need to file formal paperwork called the "articles of...

Delaware laws are flexible and operate under the principle that accessibility is very critical for the smooth running of businesses. Incorporating companies in Delaware in a way will enhance your efficiency as an enterprise and give you credibility. The incorporation has over the years worked wonders in company’s which have intentions of participating in initial public offers. Delaware has some of the most convenient legal packages which can easily translate to simple efficacy in the daily running of a business. It allows shareholders and directors of a company to come up with unanimous resolutions in written form without necessarily wasting money and time to convene formal meetings. Companies...

If you're about to start the process of incorporating your company, you need to give some thought to which state you are going to incorporate it in. Your home state does not have to be your state of incorporation, you can in fact incorporate your business in any of the states within the US. For larger businesses there are advantages to incorporating outside of your home state, with Delaware in particular offering a number of benefits. Before we discuss the benefits of incorporating outside of your own state, and in particular in Delaware, you should first consider whether incorporation outside of your home state is a viable option at all. If your business is relatively small in size, the costs of...

Keep this in mind when buying a new or aged corporation or an LLC, you are buying an corporate asset that begins or continues to appreciate the day you start the business. Should you ever consider closing or selling your business, determine the value of the aged corporation in the selling price. Most owners totally forget about the corporate value that can be sold later as long as it has been maintained properly. There are plenty of buyers looking for good aged corporations. What you get when you purchase an Aged Shelf Corporation? To create a corporation, articles of incorporation must be filed with the Secretary of State or other appropriate state agency, bylaws and organizing resolutions. A...

Delaware does not have a cause of action for oppression per se, but it does offer relief for minority shareholder oppression-like claims applying other legal principles. Thus, oppression-like claims must be carefully pleaded in Delaware. Since court's in other states are likely to apply Delaware law to oppression-like claims to companies organized in Delaware, vigilance must also be exercised in pleading claims relating to Delaware corporations in non-Delaware courts. Some courts outside of Delaware, such as the Southern District of New York and the Northern District of Illinois, have upheld causes of action for shareholder oppression under Delaware law, while others, such as the District of New...

This court makes use of judges who have specialized in the corporation laws hence they offer consistent ruling. The litigation costs are also eliminated since the cases are settled outside the courts. Corporations which are made by single members are also allowed in Delaware and the annual fees which are charged on the incorporated companies are relatively low. The state Government of Delaware is accessible and is quite friendly to the business people. The corporation law which is employed in Delaware is relatively flexible and advanced thus enabling anyone who wants to form a company here to do it easily. The Delaware company owners are able to book the international profits. This is done legally...

What state Incorporates more than a half-million business entities, including more than half of the Fortune 500 companies? New York? California? Illinois? No. No. No. That state is Delaware. With a population smaller than 88% of all states, this business-friendly state attracts more corporations than any of the major cities. Businesses choose Delaware simply because of their flexible corporate laws, highly respected Court of Chancery, a business-friendly State Government, and a customer service oriented Staff of the Delaware Division of Corporations. Among the many business-friendly laws, Delaware does not require corporations to operate in the state, only to maintain a registered agent, who may...

tart --> A corporation is a legal entity that separates the persons owning or operating a business from the actual business itself. They are set up to protect individuals from a range of possible damages and obligations that might occur as a result of doing business. Unlike other forms of business registration the owners of a corporation have no responsibility for the debts of the business and their liability is limited to the number of shares that they hold in that corporation. Corporation law has been around for a long time and the oldest corporation in the United States is the Harvard Corporation which was established in 1650 to look after the business affairs of Harvard University. The act of...

Small Business Corporations. Many small businesses are run through corporations. You have heard the radio ads that you must protect your home and banking accounts from business liabilities by running your business though a corporation. Stock Not Protected. But what protects your shares in your corporation that owns your business? In contrast to a Virginia or Delaware LLC, a court may order the seizure and sale of your corporate shares to pay judgments against you. Peter Plumber. Peter Plumber has a successful plumbing company (Peter Plumber, Inc.) with 20 employees, ten trucks and $3,000,000 a year in sales. One night he has a terrible auto accident while he was driving home from work. He ends up...

When you create your corporation and make it a legal entity in the principal State of Business, Nevada, or Delaware, one of the requirements is to Capitalize your company to give it value. What this means is to create a number of shares (stock) in the company and give it a "par value" (which may be no par value). You are taxed based on this value until you start making revenue, etc. We recommend that you Capitalize your company, at start up at 10,000,000 shares, with a par value of $0.0001 or $0.00001 (depending on the State you are incorporating in). This level of stock does a few things for you. First, it gives you a somewhat large pool of stock to work with in issuing stock to key players, and...

Protect Your Shares. In our last blog, we showed how to Protect your Corporation with an LLC if you operate your business as a regular C corporation. One of these methods is to have an LLC own all of your shares in your C Corporation; such LLCs can have more than one member. You benefit from this because there is no real protection against a creditor getting a court order to seize your shares in a Corporation. In contrast, your membership interest in certain LLCs in Virginia, Delaware and some other states and countries should be protected against court seizure and sale. S. Corporation. The S Corporation is designed for the small business where the owners want to avoid the double tax of the C...

Many business owners opt to incorporate their business to protect themselves and the business from unanticipated losses and liabilities. Both small as well as large businesses can be incorporated. It is possible to incorporate businesses in any state in the United States, regardless of where the business is operated. Many business owners choose to incorporate their businesses in Delaware or Nevada, as they are very corporate-friendly. Nevada has highly favorable corporate laws. Many new business owners and small business owners lack adequate knowledge about the corporate laws prevailing in Nevada. The most frequently asked questions about Nevada corporations, include what are the different types of...

remains a top choice for seeking secure locations for offshore protection of assets. Panama Corporation is a group of businesses engaged in various services like offshore banking, creating Private Interest Foundation, real estate, Yatch registration and so on. Now the question here is what are the reasons that make an investor to invest in Panama to start up his business. The various factors are as follows: Stable Government and political situation. The country should be safe to visit. Stable legislative environment. Developed business infrastructure. Stable economy and currency. Fully fledged tax haven. Language compatibility. The Panama corporation law was came into existence over 70 years ago and...

The Professional Corporations (PCs) are these entities of corporation for which many act of company make the special provision, regulating the use of the corporate form by licensed professionals such as attorneys, architects, engineers, accountants and doctors. A professional corporation is a corporation that is formed for the purpose of providing a professional service that by law a for-profit or nonprofit corporation is prohibited from rendering. A "professional service" means any type of service that requires, as a condition precedent to the rendering of the service, the obtaining of a license in the state...

Every state has a nickname and every nickname has a story. As the first state to ratify the constitution following the revolutionary war, Delaware claimed its title as the "first state" in the earliest stages of our nation's history. Since then, Delaware has pioneered a number of other firsts as well. Thanks to a receptive business climate, Delaware is "first" in the minds of businesspeople from Fortune 500 companies to entrepreneurs just starting their business. Delaware's laws create an environment where forming a business entity is fast, convenient and affordable. The state's judicial system is based on centuries-old principles of jurisprudence, allowing legal issues to be settled fairly and...

When should a business bankruptcy, under either Chapter 7 or chapter 11 be filed? A common scenario in today's society occurs when individuals own a corporation or are part of partnership or Limited Liability Corporation (LLC) and the business fails and then they have to deal with the various bankruptcy filing options. Many questions arise, such as should either or both the corporate business and individual owners? If so, which chapter of bankruptcy should be filed? This article addresses a couple of the many issues involved. Scenario #1: Fred and Wilma own 100% of the shares of Dino Corporation. Dino Corp. makes gravel out of flint stones for Slate Gravel Company. Anyway, due to several lawsuits...

First of all, let's tackle what an LLC is. In the legal sense in just about all of the United States, the LLC is a kind of business company that offers limited liability to its owners. It is mistakenly called a limited liability corporation by many people instead of the proper term which is a limited liability company. It is a business that has a hybrid nature and it has the characteristics of not only a corporation but a partnership as well. This provides more flexibility for the owners as they only have a limited liability for the debts and the actions of the company. The LLC is better suited for the smaller company that only has a single owner. The LLC is rather a new type of business entity here...

For many people, it's confusing to know whether to form your business as an LLC vs Corporation. The choice you make when setting up your business now can have important financial and ownership ramifications later. You can find many resources online that will give a comparison between the two and help you understand the costs and benefits to each type of company structure. Realistically, the best way to choose whether to establish yourself as a Limited Liability Corporation or a true Corporation is to consult a lawyer or an accountant who knows your field and industry very well. Often, there can be particular characteristics of your business that can make either an LLC or a corporation a...

The single member LLC is a great asset protection vehicle for the sole owner, but in order to ensure that you are really protected, you must adopt a single member LLC operating agreement and make sure you have one suitable for your business. A sole owner operating as a sole proprietorship is always risking everything he owned in order to run and grow a business. This is because his business is inextricably a part of him and so if a business problem ever arose and caused some liability, the sole owner would be personally liable. What does this mean? It means that everything he owns like his home and all his money is at risk. Before the limited liability company was available, this sole business owner...

There is some confusion between what constitutes an LLC and what constitutes a corporation - indeed this exists to the point where many people still erroneously refer to an LLC as a "Limited Liability Corporation" where the "C" actually stands for "company". There are close similarities between a corporation and a Limited Liability Company, but it is the subtle differences between the two that are important for an individual or grouping trying to decide which suits their needs better. Within the subtle differences lies the reason for picking a corporation and not an LLC - or vice versa. If you wish to form a corporation, there are steps you should always follow. 1) A corporation will generally have...

A Corporation is also referred to as a standard corporation. It is also called a C-Corporation or a Regular Corporation. A Corporation is a legal form of organization of persons and material resources, chartered by the state, for the purpose of conducting business and may have an unlimited number of shareholders, which may include shareholders who are foreign citizens. A Corporation may be public - one in which shares is offered for sale to the public or privately held - one in which shares is not sold to the public. Usually shares are held by the founders, by board members and by private investors, such as venture capitalists, who may or may not sit on the board of directors. Shareholders are...

Corporation Tax is a tax on a company's taxable profit. A company being any limited company whether by shares or guarantee, members clubs and associations, trade and housing associations, co-operative groups. A companay tax return consists of the completed Corporation Tax Return CT600 and the annual financial accounts and documents which support the tax calculation. All companies are required by law to maintain records of that company's transactions in a manner that must be adequate to enable the company to produce an accurate Company Tax Return. Company tax records must be kept for a minimum of six years from the end of the accounting period and longer if the accounts are submitted late or being...

So you've decided to incorporate your business, and you are making the all important decision of how and how much. Well, here is a breakdown of the cost differences between forming a corporation online and filing corporation papers the old fashioned way, with a lawyer. First, let's discuss the fees for an average lawyer formation and filing of corporation papers. Based upon an average hourly rate of $250.00, a lawyer would charge $1,500.00 for the formation of a corporation. This number could be reduced to around $1,000.00, depending if you know a very cheap attorney, or a family friend. However, it is safe to say the total charge will be above $1,000 based upon the average salary and time required...

Incorporation refers to the process by which a business receives the approval of the state to become a corporation. The founders of the corporation need to provide all the details about that particular business. These details are also referred to as "articles of incorporation." Besides insurance, by incorporating a business, the business owner gets added protection. In the event of a mishap or loss, it is the corporation that suffers the brunt of it and not the business owner. Business owners generally incorporate their businesses through established incorporating services, though incorporation is or even online. In America, businesses can be incorporated in any state, regardless of where the...

Most small business owners understand the main benefits of creating a corporation online or filing the articles of corporation online. However, there lies a distinction between the two types of corporation that can be filed online. The typical type of corporation is called a "C" corporation, and has the most often recognized trait of incurring double taxation. The second type of corporation actually starts out as a "C" corporation, but by filing a special form with the IRS your business will be able to qualify under the guidelines of an "S" Corporation. What are the differences? Well, first of all, both types of corporation filings will have the same set of core features that define a corporation...

Corporate law is the set of regulations instigated for the corporate world. The word corporation is synonymous with publicly owned large companies. In US, a company is equivalent to a firm or business, irrespective of whether or not it is a separate legal entity. A corporation can be called a company but a company cannot be called a corporation because a corporation is an association or a union that carries on industrial enterprises. The most important feature of a corporation is the legal independence of it from the people who are impetus in creating it. If a corporation is on the verge of bankruptcy it will affect the employees more than the higher executives. The shareholders will lose their...

A Corporation is always having separate and distinct legal entity under the state laws. These laws are different. The individuals who are taking part in the legal entity consist of board of directors, shareholders and also the officers. The corporation can legally enter the contracts, conduct the business and pay taxes. They can even file and defend the lawsuit. You should always consult your lawyers or legal professional before incorporating the business. The legal professionals will suggest you which corporation is best for your business. Below the list of some advantages are given for operating your business as corporation in Florida: You should always have a limited liability - Limited Liability...

For years smaller businesses used the structure of an S-corporation to benefit from "pass-through taxation" while avoiding the double taxation imposed on a C Corporation. Then in 1988 the IRS decided to get in sync with several states which had passed legislation allowing the formation of a legal entity called a "Limited Liability Corporation" or LLC. It wasn't long until other states began to pass their own versions of this legal entity. Today all fifty states offer the LLC as a choice of legal business entity formation alongside the traditional C Corporation, Subchapter S Corporation, General Partnership, Limited Partnership and possibly others. Are the differences between the LLC and S...

If you are planning on forming an LLC corporation, the only thing that you will need to do differently is file a Form 8832 with the IRS. The reason you need to file this form when forming an LLC is because it allows you to classify your business for federal tax purposes. In certain cases, you do not need to file this form because your business will automatically be classified as that way. This can happen because of the entity classification rules that are set forth by the IRS. If you plan on forming an entity that fits into one of the guidelines set forth by the IRS than you will not have a choice as to how your LLC is going to be classified for federal tax purposes. Any limited liability company...

Apparently, there may be no Christmas this year as OSHA has levied steep fines on Santa Claus Corporation. It seems as if there are serious charges, fines, and even criminal negligence at issue in several of Santa Corporation's North Pole Factories. What has happened you ask? Well, it appears that due to the strengthening of the Unions during President Barack Obama's stay in office most of the elves working in the Toy Factories have demanded more money, less work, more benefits and have staged strikes, work slowdowns, and sit ins. The company was forced to do a lock-out recently of all the elf workers, and there have been huge demonstrations, picketing, and threatened boycotts of Christmas all...

Most states make forming a corporation relatively painless by providing forms for practically everything. The bylaws of the corporation, however, are an area you don't want to rely on a form. What Are Bylaws? Bylaws are the technical rules that govern how a corporation will be run. They are a private document for the corporation and are not filed with any government entity. The purpose of the bylaws is to set out how things such as meetings, voting and share transfer will occur with the business. Provisions Typically, the bylaws will be the biggest document in your corporate book. If you are a single shareholder entity, they tend to be fairly straightforward since there isn't really any dispute...