Hot answers tagged corporation
6
Correct, protection from personal liability is the primary benefit of incorporating. This benefit involves more than just customer lawsuits against you - just think about any other party you will be signing a contract with for your business: 1) Potential investors also want limited liability, 2) limited liability also protects your personal assets from ...
5
If by "catch" you mean state taxes, your company will still have to pay state taxes in the state it actually does business in, regardless of where you incorporate the business entity. So if you incorporate in Delaware but set up shop in California, you will still have to register the Delaware corporation in California and pay California taxes. Online ...
4
Articles of Incorporation are generally considered public records that anyone can access. Sending him a copy is not giving him anything that he could not get from the Secretary of State's office anyway.
If what he wants to do is verify that you are legit, that is a corporation in good standing, he should verify that for himself directly with the Secretary ...
4
Stockholder and Shareholder mean exactly the same thing -- somebody who owns shares of a company's stock. Some state laws (most prominently, Delaware's) use the word 'Stockholder.' Others (any state whose law is based on the Model Business Corporations Act) use the word 'Shareholder.' They're interchangeable.
'Stakeholder' has no legal meaning. It's ...
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There's a bit of a confusion here. First, you have to understand (according to the IRS circular 230), that my answer was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. This is not a tax advice.
The benefits of S-Corp are that you may not be required to pay ...
3
No, an accountant is not required. I've done my Ontario Provincial T2-Short my self every year since 2006, it is not even that complicated. You only really need an accountant if you start getting in to a lot of accounting tricks etc.
You can also buy off-the-shelf software to do your T2 Corporate tax return for a few $100 from Quickbooks or the like, but it ...
3
Just asked my lawyer: protection against personal liability in injury lawsuits is the same - you're not personally liable for faulty products as long as you're incorporated. The difference is in personal protection against financial wrongdoings by the company (i.e. courts can waive protection in certain cases).
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The process is pretty straightforward and I did the same when I moved my LLC from Ohio to Texas. You basically form the the new Corporation and merge the LLC into it via an Asset Sale Agreement.
I retained the services of a local attorney in Texas to help draft the Asset Sale Agreement. The agreement details the transfer of the Name, EIN, "books", assets, ...
3
An LLC can be taxed like a corporation. By default an LLC is a pass-through entity, but if you file Form 8832 with the IRS, you can change your LLC from pass-through taxation to corporate taxation.
I can't speak on the legalities of it in connection with your scholariship, so you are best served talking to a tax attorney, but yes you can structure your LLC ...
3
You don't need a lawyer to file a Delaware certificate of incorporation... it's simple enough to do it online. But even though you are a single-owner, you may need a lawyer to help with:
Determining whether a "C" corp, "S" corp, LLC or other entity structure is most advantageous, and whether to incorporate in DE or in your home state. There are a variety ...
2
As long as you are not paying yourself dividends as employment-tax-free distributions, then salary does not need to be paid. The IRS writes:
The IRS sends this reminder: An S Corporation must pay reasonable compensation (subject to employment taxes) to shareholder-employee(s) in return for the services that the employee provides to the corporation, before a ...
2
So you have a range of options for keeping control. These will vary by legal system and country but in general:
Write it into the rules of the company. Anyone else buying in has to abide by the rules.
Always keep 51% for yourself. Only make the remainder available at all times thus you have final say on all votes.
Have 2 classes of shares "voting and ...
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Well, I am not a lawyer, but my understanding is that the liability protection is very similar.
I'm not sure what @dnbrv means by The difference is in financial protection. If that is in reference to business debts, LLCs will also provide you with limited protection against business debts. Maybe the difference is in what the cap is?
In real life things get ...
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You should change CPAs. If you operate your business in Virginia, you will have to pay Virginia state taxes, regardless of where the corporation is formed. If your corporation only has a single stockholder, then you probably don't need to incorporate in Delaware -- most of the advantage of Delaware only really matter when you have multiple shareholders ...
2
Delaware tax is indeed flexible, and Delaware imposes tax only on income earned in Delaware. Depending on your business plans, it may be favorable. You should check what taxes you pay to Virginia, as well. As you live in Virginia and will probably work for your corporation, it will likely to be required to qualify to do business in Virginia and pay VA taxes. ...
2
File the 1120 tax return marked as "final", similarly to the state if it requires tax returns, and whatever form the state you registered with requires to close the corporation. Some paperwork might be required to show that there are no outstanding liabilities.
Check the Secretary of State/Department of Corporations of the state where you're registered for ...
2
From legal perspective, he has 20% of the stock. You can't just take it away from him. It might not be very nice from your side, but can you issue 1B more stocks and assign them to yourself? Basically dilute your partner, so that he has less than 0.000001% of the company? Again, I would try to talk to him first, maybe you can agree on something...
For the ...
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Obviously you need to check with a tax lawyer, but this is my understanding: If you do not live in the US and you own a US C-corporation. If you then sell this corporation there is no tax due in the US on the sale (a foreigner owning shares in a US corporation does not need to pay tax when selling those shares)
Then the question of if you have to pay tax ...
1
You have to contact the company itself. Delaware doesn't require the corporations it registers to report ownership, and with C-Corp it can be a lot of shareholders (which may change frequently).
IIRC Delaware doesn't require reporting any ownership information at all, and doesn't even require reporting the principles.
1
Nobody cares - you can ask your friend to do that for you for free - it's not illegal
Don't do it, that will make USCIS think that you're actually doing some work there.
Very important - have a co-founder for your C-corp and make him/her take every single role (president, treasury, etc), otherwise you will be considered an employee there even if you ...
1
You're allowed to invest in a business, but you're not allowed to participate in a business.
Meaning - you can fund the company, but you cannot be an officer, director or employee. You cannot sign contracts, hire employees, sign statements etc. You can only be a passive investor. Basically, if you're the only investor - you'll be breaking the law one way or ...
1
One other thing to think about is what happens to the business if one of your creditors (i.e. not a creditor of the business) goes after you personally. In most states, the creditor can take your shares of an S-Corp and use the resulting control to liquidate the company. LLCs can provide some protection from this in the form of "charging order protection" ...
1
Do you get penalized if you have a S Corporation company and you don't make any profit in two years?
That is simply not true.
You may have heard part of something else, however:
You can get penalized for not filing your 1120S income tax statements (including the very first year of incorporation) even if your profit is 0. http://www.irs.gov/instructions/i1120s/ch01.html (see "late filing of return")
The state of the corporation shouldn't matter for ...
1
Your idea won't work -- all that does is create a New York subsidiary of the Delaware corporation.
Why don't you just transfer the relevant stuff over to the new Delaware corporation? If you haven't registered either your trademarks or copyrights, that's a really easy thing to do.
If you want to merge, you'll have to deal with the requirements of both ...
1
The US Small Business Administration has an extremely comprehensive page on registering a fictitious name which contains a chart showing the DBA filing requirements for several states. Some states do not require filing. New Hampshire, not only requires one to register a trade name but also charges a fee of $50.
The specific laws surrounding trade names can ...
1
The only thing you are legally allowed to do is sell stuff as yourself, ie, under your own name.
Suffixes like "Corp" and "LLC" have very specific legal meanings so you can't use them unless you create a real company under state law.
A relatively simple option is to create a DBA. This likely also requires some paperwork with state or local government.
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You do not need a new EIN. You can use your first EIN, as long as you continue as a Sole Proprietor.
From the IRS website:
The IRS cannot cancel your EIN. However, if you receive an EIN but later determine you do not need the number (the new business never started up, for example), the IRS can close your business account. The EIN will still belong to ...
1
Form the LLC in NH because that is where you are doing business. If you form the LLC in another state, you will have to register it in NH, anyway, so you will incur duplicate startup and ongoing costs.
Disclaimer: This information does not constitute legal advice and does not establish an attorney-client relationship.
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Why do you think you need to "free up equity?" This idea is, well, non-standard. If new money needs to go into the s-corp, new shares are issued. Everyone is appropriately diluted by the new issuance. Unless you have a situation where the company can't issue new shares because of overly strict protective provisions or can't amend the articles because the ...
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The board typically issues authorized shares, but additional shares are generally authorized for issuance by the current shareholders by majority approval.
The precise answer would depend more on the current status of the C corp and how shares have been issued and sold.
If this is still the "3 guys in the basement" stage, you pretty much will just file ...
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