Who can form a corporation?
Anyone who completes the articles of incorporation and pays the state filing fee can form a corporation. There is no age, residency or other legal requirement.
Do you need an attorney to form a corporation?
No, you do not need an attorney to form a corporation. You can prepare the legal paperwork and file it yourself, or use a professional legal documentation service such as Corporate Store Front.
With our lawyer-free service, you can save up to 85% off the rates an attorney would charge for the same procedure. In addition, 70% of those who try to complete their own legal documents make mistakes. Our legal professionals will ensure that your documents are filed correctly and are treated with the utmost care and attention.
What is the procedure for forming a corporation and what legal documents are required?
In order to create a corporation, articles of incorporation need to be filed with the Secretary of State. Next, bylaws and organizing resolutions must be adopted. A corporation will also need to apply for a tax identification number with the IRS.
Unlike many other incorporation services which only create and file the articles of incorporation, Corporate Store Front will prepare and complete all of these required documents for you, including customized bylaws and organizational resolutions.
Everything included in the Corporate Store Front package, all for $695 Flat Fee:
- Corporate Name Reservation
- Articles of Incorporation (Inc.) / Articles of Organization (LLC)
- Limited Partnership Agreement / Certificate of Limited Partnership
- Bylaws / Operating Agreement
- Organizational Minutes for required Bank Account Set - Up
- Form 25102(f) with the Department of Corporations Limited Offering Exemption Notice
- Form SS4 - Federal Tax Identification Number
- California State Tax Identification Number - EDD Registration - Form DE1
- File Statement of Information
- Form 2553 - IRS Sub-chapter S Election, if applicable ($50 additional fee)
- Professional Corporation Election, if applicable ($50 additional fee)
- State Application for Sellers Permit
- Statement of Registered Agent (for Corporations with address outside CA)
- Free Logo Consultation
Where should I incorporate?
A corporation can incorporate in any of the 50 states plus the District of Columbia.
Many people choose to incorporate in their home state, which can save them money in filing fees. That is because corporations are required to register in each state where they do business. For example, a Delaware corporation that has its main business office in Florida must register as a "foreign corporation" with the Florida Secretary of State.
Delaware is popular because of its history, experience, popularity and pro-business climate. Nevada is also popular because of its pro-business environment and lack of a formal information-sharing agreement with the IRS.
What are the advantages of incorporating in Delaware?
According to the Delaware Secretary of State, the following are the advantages of incorporating in Delaware: More than half a million business entities have their legal home in Delaware including more than 50% of all U.S. publicly-traded companies and 58% of the Fortune 500. Businesses choose Delaware because we provide a complete package of incorporation services including modern and flexible corporate laws, our highly-respected Delaware Courts, a business-friendly State Government, and the customer service oriented Staff of the Delaware Division of Corporations. These factors have all contributed to making Delaware a premier legal home to companies around the world.
What are the advantages of incorporating in Nevada?
According to the Nevada Secretary of State, the following are the advantages of incorporating in Nevada:
- No Corporate Income Tax
- No Taxes on Corporate Shares
- No Franchise Tax
- No Personal Income Tax
- No I.R.S. Information Sharing Agreement
- Nominal Annual Fees
- Minimal Reporting and Disclosure Requirements
- Stockholders are not Public Record
How much will it cost annually to operate a corporation?
Each state charges some type of annual fee to maintain a corporation. In many states, you must also submit an "annual report" or "list of directors and officers," which is a one-page form sent by the state. Some states also have state taxes. Annual fees for three popular states – California, Nevada and Delaware – are as follows:
- California: A reporting fee of $25, along with a list of directors and officers, is required every year, beginning 60 days after incorporation. State income tax for C-corporations in 2004 was 8.84%, with an $800 minimum (the minimum tax is waived the first year). State income tax for S-corporations in 2004 was 1.5% for most types of income, with a minimum of $800 (the minimum is waived the first year).
- Nevada: An Initial List of Officers and Directors is due 30 days after incorporation with a $125 fee. Annual fee is $125. There is no state income tax or franchise tax.
- Delaware: A minimum annual franchise tax of $30 (which increases based on the total number of shares authorized). Annual report filing fee is $20. There is no state income tax.
- Every Other State: Contact a local accountant.
How much will it cost annually to operate an LLC?
Each state charges some type of annual fee to maintain an LLC. In many states, you must also submit an "annual report" or "statement of information," which is a one-page form sent by the state. Some states also have state taxes. Total annual fees for three popular states – California, Nevada and Delaware – are as follows:
- California: A reporting fee of $20, along with a statement of information, is required 90 days after formation and then every two years. An annual LLC tax of $800 is due 75 days after formation and every year thereafter. If the LLC's net income exceeds $250,000, there is a minimum annual LLC fee of $865.
- Nevada: An Initial List of Managers and Members is due 30 days after formation with a $125 fee. The annual report filing fee is $125. There is no state income tax or franchise tax.
- Delaware: There is an annual LLC tax of $200 due each June 1, beginning the year following formation. There is no state income tax.
- Every Other State: Contact a local accountant.
Is a written partnership agreement required for every partnership?
It is usually a good decision for partners to work out the details of the partnership and create a written partnership agreement because if you do not then state's rules regarding partnership will govern your partnership.
We will help you create a framework partnership agreement so you don't have to spend a fortune on lawyer's fees to create a valid agreement.
What is a DBA?
DBA is an abbreviation for “doing business as.†Certain jurisdictions may use the terms fictitious business name, trade name or assumed name instead of DBA. DBA registration is necessary if your business operates under a name other than its legal name. The legal name of a corporation, LLC, or other state registered entity is the name on the articles filed with the state, and for all others the personal name of the business owner or owners. Conducting business and opening a bank account under a name other than the legal name of your business is only possible after you have fulfilled your state’s DBA filing requirement.
What are the Requirements for a DBA?
A DBA statement must generally be filed before using your DBA in the operation of your business, and in some cases within 30-40 days of your first business transaction. In addition, there are several states that require publishing your DBA statement in a local newspaper, and then filing proof of publication with the proper government office. The objective of publication is to inform the public of new businesses in the area, their legal name and ownership.
A DBA name may not contain any word or corporate ending that implies it is anything other than a DBA, unless the DBA is being filed for a corporation, LLC or other state registered entity. For example, if Joe Smith operates a sole proprietorship under “ABC Plumbing,†he cannot file a DBA as “ABC Electical, Inc.†In order to have the title of corporation or LLC you would have to form and file such an organization with the appropriate state agency.
If I have a corporation or an LLC name, do I also have to file a DBA under that name as well?
The articles of incorporation or organization are enough for official name registration and business name transactions with financial institutions provided that the entity uses its legal name. A DBA is simply a name statement registered with the state and not an official business formation like a corporation or an LLC. If your business is incorporated or organized under state law, you only have to register a DBA if you operate your business under a name other than its legal name as filed with the state.
If I am operating a sole proprietorship under my personal name, do I need to file a DBA?
No. DBA filings are only required when you are operating a sole proprietorship or partnership under a name other than your personal legal name. For example, if your name is John Smith and you are operating or desire to operate a sole proprietorship as “John Smith Electical Services,†or a partnership as "Smith & Associates Electical," then you would not need to file a DBA to conduct business under that name. However, if you are a sole proprietorship, you must file a DBA to legally be called “Smith and Associates Electical.â€
Can someone else use my business name if I have a DBA?
In most states, DBAs, unlike corporations or LLCs, do not guarantee exclusive use of a name. In most cases, the state or county will file any correctly prepared fictitious business name statement, regardless of name conflict.
Can I conduct business and open a bank account before my DBA has been filed?
You should not be conducting business under your fictitious business name until you have filed the DBA statement. In addition, most banks will not allow you to open a bank account until they have seen proof of the filed DBA.
When you are doing business under a company name, you need a company bank account to accept payments for the company. Banks have restrictions about not accepting or cashing company checks using your personal account.
Every bank is different. Most banks have policies and requirements in regards to a DBA statement. If you experience a bank employee who will not accept your DBA statement, you may want to try a different branch or bank. Make sure to keep the original copy for your records in case you need it for future business transactions.
Does Corporate Store Front, Inc. provide legal advice?
No. Corporate Store Front, Inc. does not engage in the practice of law by rendering legal advice, but does offer general and non-specific information.
Does Corporate Store Front, Inc. provide tax advice?
All taxpayers should obtain separate professional advise from an independent tax advisor. The content of any Corporate Store Front, Inc. document may not be used or relied upon for the purpose of avoiding U.S. federal, state or local tax penalties. Unless otherwise specifically indicated, you should assume that any statement in any document relating to U.S. tax matter was written in connection with the promotion or marketing, by other parties, of the applicable transaction(s) or matter(s).
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