A corporation is a separate legal entity, authorized by state statute. The Secretary of State of each state authorizes the filing of articles of incorporation, which provide for, among other items, bylaws, stockholders, directors, officers, employees, annual meetings, resolutions and the rules and regulations by which the corporation is to operate. The corporation is a separate and distinct person; it cannot be used or operated as the alter ego of the stockholders, directors or officers. Corporate formalities must be maintained.
What
Is Meant By Corporate Formalities?
State law and legal procedures require that certain actions of a corporation
be documented. The maintenance of these records is an integral part
of liability protection offered by a corporation. If these records are
not maintained to document and authorize the actions of the directors,
officers and stockholders of a corporation, a litigant can attempt to
"pierce the corporate veil" and directly sue the directors,
officers or stockholders for debts of the corporation.
Why
Should I Incorporate?
There
are several reasons, including:
1) Tax Savings
2)
Privacy
3) Asset Protection
4) Financial Flexibility
What
Are The Advantages Of Incorporating As Opposed To Sole Proprietorship?
Historically,
individuals incorporated to take advantage of the liability protection
of a corporation. The personal assets of stockholder, director, founder
or owner can not be attached or seized to satisfy the corporation's
debt; only the assets of the corporation are vulnerable. In a sole proprietorship,
the owner stands to lose everything, his home, savings, auto, etc.,
when a mistake is made. By incorporating, you can avoid being personally
sued, avoid probate costs, avoid inheritance taxes, and live with the
assurance and comfort that no one can take that which you have accumulated.
Are
There Additional Advantages?
Yes, by properly utilizing your corporation, you can attain privacy, achieve
tax savings, increase earnings and protect yourself from taxing agencies
and law suit prone attorneys.
In Nevada, a one-man corporation is lawful. One person can be the stockholders, directors, and all the corporate officers. There is no need to share private and personal information with any other person. Nevada allows you to take privacy to another level: Nevada statutes provide for the appointment of officer nominees. The director, president, secretary and treasurer are a matter of public record; stockholder and vice-presidents are not. Thus, you can have a director-officer nominee, appoint yourself as vice-president and no one will know that you are involved with the corporation.
There are numerous strategies available for utilizing a corporation to lower taxes. These savings originate from the ability to utilize certain business expenses as deductions against income of the corporation. These same expenses, when paid from personal income, cannot be deducted from personal income.
All corporations begin as a "C" Corporation. The "S" Corporation status is an election made by the director(s) of the corporation. The "S" Corporation is treated similarly to a partnership for tax purposes. The profits and losses flow through to the stockholders, based on percentage of ownership, and avoids taxation at the corporate level. There are adavantages and disadvantages to each corporate status. Please confer with your accountant to discuss your particular situation, or feel free to call our office US toll free 877.870.6773 and we will be happy to recommend an accountant who can assist you.
incorporatenow.com, Inc. will facilitate the incorporation process for you. We will handle all your paperwork and speed up the incorporation process for you. We will provide you with a corporate kit, corporate seal, preprinted stock certificates, corporate bylaws, corporate minutes and forms of resolutions. We will give you expert consultation to assist you to achieve your corporate goals.
Nevada State Law provides that you can live and do business anywhere in the world with a Nevada Corporation, but you are required to have an agent in Nevada to represent you. incorporatenow.com will act as that agent on your behalf.
Having an office presence is a requirement by Nevada State law. In order to ensure that the personal liability protection offered by a corporation is maintained, all state requirements must be met. See State Requirements. Each year thousands of small businesses and individuals are forming corporations to protect themselves form frivolous lawsuits and to greatly reduce the taxes they must pay. This in turn causes the taxing agencies and litigantion prone lawyers to seek ways to 'pierce the corporate veil". "Piercing the corporate veil" simply means establishing that the corporation is merely the alter ego of the stockholder(s). If opponents can successfully "pierce the veil", the tax benefits and limited liability features of the corporation are set aside and the stockholder, officer, or director are held personally liable for the corporate debts and taxes.
The courts have established the following guidelines to determine whether a corporation is in fact a true corporation and not the alter ego of the stockholders:
Does the Corporation
have an actual business address? Does the corporation
have a checking account, with canceled checks to show that the corporation
has actually paid for its overhead and other expenses? Has a business license
hang been issued to the corporation by the appropriate licensing agency?
Please note that if you are not doing business in Clark County,
Nevada, a business license hang is not required.
Does the corporation
have a listed telephone number?
© 2002 Millennium Corporate Services. All rights reserved. > Terms & Conditions > Disclaimer > Home