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A corporation or LLC is a legal entity that has a separate
existence from the individual(s) who forms it initially and
its owners and operators. It is created by filing Articles
with the appropriate state officials. It can contract, do
business, sue and be sued, and enjoy most of the privileges
of a separate entity.
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An LLC is an unincorporated association that offers a
combination of limited liability and special tax treatment.
Limited Liability Companies (LLCs) were introduced in the
late 80’s and early 90’s and do not have the
long, established history of corporations. LLCs were originally
limited to two or more persons and with a limited life. Most
jurisdictions have eliminated those limitations.
LLCs were intended to plug some gaps that were left unintentionally
after the Tax Reform Act of 1984. Essentially, the taxation
rules governing partnerships were thought to be more favorable
than other tax treatment for real estate ventures, equipment
leasing and certain other businesses where passive income
and depreciable assets were involved. Unfortunately, partnerships
were wide open to liability and could not afford the (general)
partners any liability shield whatsoever.
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LLCs allow the governance of the entity by Managers instead
of officers and directors. Operating Agreements can be drawn
so that the governance and, to some extent, taxation can
be manipulated in ways favorable to the company. Many states
now permit Limited Liability Partnerships that combine the
liability shield of corporations with the tax treatment of
partnerships.
As a result, LLCs are often preferred for real estate
syndications, equipment leasing, holding companies, and
businesses that will derive their principal income from
passive investments. LLCs are also commonly
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A partnership consists of “general partners” and
has no liability shield. Each general partner gets to participate
in the management, but each is equally liable for the debts
and obligations of the partnership. A limited partnership
is a partnership that has one or more general partners who
manage the business and limited partners, who are normally
passive investors in the business. The general partners manage
the business and are personally liable for the debts and
obligations of the partnership. Generally, limited partners
are not permitted to participate in the management of the
business and are not personally liable for the debts and
obligations of the company.
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One or more. This can normally be handled by the business
incorporation service but some states still require signatures
from the persons involved.
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H |
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One or more. This can normally be handled by the business
incorporation service but some states still require signatures
from the persons involved.
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You may choose any name you like, provided that it does
not infringe on the rights of someone else using that name.
You will not be able to name your soda shop “The Coca
Cola Company.” The name must also include at least
one of the following words or abbreviations: Company, Corporation,
Incorporated, Limited, Co., Corp, Inc. or Ltd or “Limited
Liability Company or LLC.” We have chosen “Inc.” as
the ending for our incorporations and “LLC” for
our Limited liability companies. You can change this if you
wish.
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Authorized capital is the number of shares of stock your
corporation is authorized to issue. Some states charge more
for extra authorized capital. In most small businesses, only
a few shares are needed to vest the owners with complete
control of the company. The additional shares remain authorized
and may be issued later if the need arises. Remember that
authorized capital is the number of shares your corporation
can issue, not necessarily the amount you have already issued
or plan to issue in the future.
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S corporations cannot issue more than one class of stock – generally
common voting stock. C corporations can issue multiple classes,
such as preferred stock, Class A, B , C, etc. and can sometimes
give different rights and privileges to the various classes.
LLC’s usually issue “Member Units” and
do not have classes of stock.
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Why must I have a registered
agent and registered office? |
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The registered office is the street address where official
and important papers concerning the corporation can be sent.
It cannot be a P. O. box. The registered agent is the person
there that can accept the papers for the corporation. Your
registered office and agent must be located in the state
of your corporate domicile –that is, the state where
you are incorporated.
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The incorporators (for corporations) and organizers (for
LLCs) are the persons of legal age who have provided the
ministerial service of filing the papers. They do not own,
manage or have any rights in the business, but are simply
serving an administrative duty. In most cases serving as
incorporator is part of the online incorporation services
we provide. Some states still require signature by the persons
involved.
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We will file those for you in most cases. They are sent
to the appropriate state officials for recording. In some
cases, we will send them directly to you for required signatures
with instructions as to sending them to the appropriate state
officials. After the Articles have been recorded, they will
be sent to you at the address you listed. We suggest that
the Articles (and all important corporation papers) be kept
in a special notebook or corporate kit. You may wish to order
a corporate kit as part of your incorporation.
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That’s up to you. Attorneys can charge anywhere
from $750 to $5,000 for relatively similar incorporation
services. Complex transactions, like tax shelters, mergers
and acquisitions, and companies going public, may be advantaged
by a carefully tailored professional incorporation. Our forms
were prepared by attorneys with extensive experience. An
attorney reviews each filing before it is sent out, but only
checks for errors that would prevent acceptance of the filing.
We act only in an administrative capacity by filing the
papers
for you and do not give legal, tax or accounting
advice.
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Yes, but there are additional steps required before you
can actually begin operating as a corporation. The laws of
most states require that you:
a. Adopt Bylaws or Organizational Agreements that will
govern the conduct of the business.
b. Hold an organizational meeting to confirm the start-up.
c. Elect directors for your corporation.
d. Elect officers.
e. Set corporate policies for your corporation or LLC, such as
bank account signature requirements, employee compensation and
benefits.
f. Adopt minutes approving tax elections and preferred tax treatment.
g. Issue shares of stock or membership unites.
h. Adopt banking resolutions.
i. Approve any other material agreements or contracts, such as
leases, employment agreements, stock buyback agreements, confidentiality
and non-compete provisions and others that may be desirable for
your corporation or LLC.
j. Obtain your corporation’s tax identification numbers from
the IRS (and from your state tax office in many cases.)
k. Obtain any required local business permits or licenses.
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We can help you file a Statement of Change of Registered
Office And/Or Registered Agent. You may contact
us.
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No. Most states allow you to reserve a corporate name,
but there is really no advantage if you are ready to incorporate.
A name may be reserved so as to save it for later use, but
if you’re ready to form the corporation now, and the
name is available for use, there is no need to reserve it.
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We asked you to select several possible names. We will
check name availability if your state permits that without
charge. If none of your selected names are available, we
will contact you and resubmit your paperwork.
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Yes. Changing the name of a company requires amending
its articles of incorporation.
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You’ll need to file an Application for Certificate
of Authority with the appropriate states. You may call or
email us and we can assist you.
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Yes. Articles of Amendment or Restated Articles must
be filed. In some cases, the change will require a vote of
your
owners. You may call or email us and we can assist you You
must file Articles of Amendment that must be signed by the
chair of your company’s board of directors or sometimes
by any one of your company’s corporate officers.
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Not if you are doing business under your corporate name.
You will need to file if you use other names. Since assumed/fictitious
names must often be filed in each county where you do business,
we do not recommend using assumed/fictitious names.
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