The corporation is arguably the most well known business entity, and it has been around for the longest period of time. It consists of shareholders, a Board of Directors, and executives & employees. The most notable feature of a corporation is that the owners of the corporation (the shareholders) are not personally liable for the business debts and court judgments incurred by the corporation. However, did you know that corporations are governed by state law, thus the 50 states each have different rules governing the corporations formed and located in their states? Moreover, did you know that there are different tax elections available for corporations that could impact not only the taxes owed by the corporation but also the shareholders?
Being informed and knowledgeable about the rules and regulations related to forming a corporation and their maintenance is the best way to assure that the protections and advantages you are expecting by incorporating are there when your corporation needs them.
Learn if your corporation qualifies as an S-Corp, which avoids double taxation, and how to apply for one. Get the documents you need to file your corporation, including the Articles of Incorporation and the Bylaws, which are filed with the state in order to register. These documents will lay out the important aspects of ownership, distributions, responsibilities and rights, and pave the way for a smoothly operated business.