Whether one wishes to incorporate or forming a corporation in the state of California or any other state of the U.S., BAAS assists them with the process. While most clients need to get the preparation, as well as the filing, done, some wish to only get the filing done of the documents created by them.
A corporation is sometimes referred to as the C Corporation. It is an independent legal entity that is owned by its members called the stakeholders. However, for any debts or losses, not the stakeholders but the business itself is responsible. The corporation structure is quite complex in nature and involves a lot of fees and other legalities.
Advantages of Corporation
- The corporation has limited liability that is in case of business debts or other actions the personal assets of shareholders are not affected.
- Corporation needs to pay taxes unlike an LLC. Also the owners of the corporation need to pay their individual taxes.
- Corporation can raise its funds by selling stocks that it holds.
- Most potential employees find corporation to be high competitive in terms of the partial ownership they offer through the stocks they hold.
An individual who wishes to form a corporation needs to know the following points:
- Type of corporation he/she wishes to form or incorporate
- Selection of a company name (which is available for use)
- Address of your corporation
- Total number of shares he will be authorizing
- Number of shareholders of the corporation
Steps Involved in Formation of a Corporation
- Choosing a name for the corporation (fictitious name is allowed too)
- Filing articles of incorporation
- Obtaining business license and permits
- Hiring employees and starting with the business
For the formation of a corporation, the articles of Incorporation need to be filed with the secretary of state. Additionally, EIN or the Federal tax ID number is to be obtained from IRS. Once the corporation is formed, it is necessary to file the first annual statement of information with the state within the first 90 days.