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A corporation exits as a separate entity apart from the owners and may negate in business, make contracts and sue and be sued. The corporation pays its own taxes. Incorporation involves the filing of a charter of a certificate of incorporation with the sectary of stat e in the state where you want to transact business and where the principal office of the business is located, as well as payment of a fee.
A corporation can be publicly or privately owned. A public corporation is one whose stock is openly traded on public stock exchanges and anyone can buy or sell shares of stock he owns in the company. A private corporation is owned by one or a few people owns are actively involved in managing the company.
For details on what is required to incorporate in the state where you want do business, go to www.statelocalgov.net/50states-secretary-state.cfm and select the state. You can find links to business organizations and find all the steps required to incorporate your business.
Typically, business hire an attorney when filing or form a corporation. However, several business online can process the paperwork necessary to form a corporation. Here are two worth looking it
For more information on corporations, check out incorporating your business for dummies.
The advantage of forming a corporation include the following:
Liability is limited. Because a corporation exists as a separate entity, there is a distinct separation of the business assets and the shareholders’ personal assets. If the business fails, the stockholders are not personally responsible for the debts of the firm, their liability is limited to the amount of their initial investment.
Transfer of ownership is easy. Ownership changes hands when stock holders sell or trade shares of stock.
A corporation can continue indefinitely. The existence of corporation does not depend on the fate of any one individual. Unlike a proprietorship or partnership, which ceases o exist on the death or withdrawal of an owner, a corporation has perpetual life.
