How to Incorporate in the U.S.A

2007-03-08 10:33:40

( Business )



Incorporation – to form a corporation. This includes diverse categories of activity from a business to a non-profit organization

How to incorporate: legal and other advantages

i) Your personal assets are protected
You are protected from creditors and lawsuits. Whereas sole proprietors and the partners in a partnership are accountable for the liabilities of their business, in a corporation, the members involved (stockholders and directors) are not liable for debts and other obligations. Their liability is limited to what they have personally invested.

A corporation can have personal assets, which are safe if a lawsuit is brought against it. A creditor or corporation owner can only seize his or her own shares.

ii) Ownership is transferable

The ownership can be transferred either completely or partially. In certain states, the laws in this respect are very favorable. For example, if you want to transfer the ownership of your corporation, you don’t need to file or record the transfer

Retirement Considerations

When you decide [how to incorporate] funds and plans with respect to retirement are easily set up. Your personal health insurance can be deducted from the corporation.

Tax Issues

Corporate taxes are lower than individual taxes. A corporation can buy shares in other corporations and the dividends they receive are not taxed. A corporation can take its losses ahead to following tax years

Selling Stock to Raise Funds

You can readily raise capital from investors by selling your stock.

Durability

The corporation can carry on existing, even if its members die.

Credit Rating

When you decide [how to incorporate your business, a corporation credit rating is independent of that of the owners. A corporation can establish its own credit history by making an application for and making use of corporate credit.

Steps To Take When You Decide To [incorporate your business]
i) You need to file the Articles of Incorporation

In order to do this you need to make sure that the name you want to use has not already been used. To do this refer to the corporate filing office and the federal and state trademark registers

Then fill in the form stating:
- Why you wish to incorporate
- Where you wish to incorporate
- How many and what type of stock shares you possess.

When you file these documents you will have to pay a registration fee.

ii) You Need to Name Your Corporation

The name has three parts:
Lion Auto electrical Inc.

- Distinctive element – Auto electrical
- Descriptive element – Lion
- Legal ending – Inc.

The distinctive element and the legal ending are compulsory

iii) You must complete Corporate Bylaws

You need to file this. This defines elements such as
- When to hold your yearly shareholders meeting
- Voting rights
- How shareholders will be informed of other meetings

The business affairs of your corporation are very easy:
- Keeping a record of important corporate decisions (loaning money etc)
- Having a yearly meeting

They can be done in writing.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.