A corporation is basically a legal organization composed of material resource and personnel. Also, in order conduct business, a corporation must be chartered by the state. A corporation is also owned by shareholders. You should also know that the board of directors are the ones who take care of the business procedures. The ones who will manage the daily activities will be the elected officers. The corporations are also obliged to follow the corporate tax laws. It’s necessary for them to legally file corporate taxes.
Knowing more about C corporations or regular corporations is also important. This kind of corporation may also have unlimited shareholders. Foreign citizens can also become shareholders. You should also know about the public and private shareholders. The usual occurrence is that the shares are held by founders That also includes the board members and private investors. The shares of the corporation can also be held by venture capitalists.
These days, it’s quite common to have the C corporation. The C corporation is known to be a for-profit business. State authorities are also needed when it comes to registering a C-corporation. The process of C corporation registration also means that the corporate laws have to be clarified.
It’s also important to keep in mind that the corporation’s liability does not affect the shareholders. That is also known as the limited liability. However, you should know that double taxation is something that’s involved in C corporations. That involves the taxation of the corporation based on the profits that they have. By acquiring distributions, the shareholders will also be taxed. They have to be taxed for dividends.
Registering your business’ name is necessary when it comes to incorporation. Also, you have to file a certificate of incorporation and pay the necessary fee. Also, it’s necessary for you to draft the corporate bylaws. Holding a meeting for the board of directors is also necessary.
The significance of incorporation
One thing that you should know about incorporating is that it is a good way to protect your personal assets while you do business. That said, such is the reason why many people incorporate. However, you should know that there are more advantages that incorporation can offer.
If you want to save tax money, then having your own corporation is important. Those who owns a corporation also have better flexibility for their business. Also, having a corporation means that there will be fewer audits to worry about. You can also have better tools for itemization. Another benefit of having a corporation is the fact that it won’t be too complicated to raise capital.
One of the main advantages of a corporation is a limited liability. That’s because shareholders and the corporation itself are two separate entities.