Incorporation

We incorporate firms and establish limited liability companies in all 50 states. Our incoporation service is fast and affordable, providing you with the necessary business structure. Additionally, we file subchapter S elections, as well as other pertinent forms

To incorporate or not to incorporate, that is the question!

Corporation

A corporation is a separate legal entity existing under authority granted by state statutory law. It has its own identity separate and apart from its shareholders/owners, thereby, limiting the liability of the shareholders.

As a separate legal entity, a corporation is responsible for its own debts. Normally, shareholders, directors, and officers are not responsible for corporate liabilities. If the corporation suffers losses, the corporation itself must bear those losses to the extent of its own resources, and not the personal assets of the individual shareholders. In effect, however, shareholders indirectly bear these losses by a decline in the value of the stock they hold in the corporation.

Note however, that shareholders, directors, and/or officers may be held liable for the debts of the corporation where the court imposes "alter-ego liability" or "pierce the corporate veil" , in which the individual as personally liable for the coproation's debt.

For small businesses, it is useful to file under subchapter S, which essentially allows the corporation's income to "pass-through" and be taxed at the individual level for federal income tax purposes, thereby avoiding the double taxation paid by normal corporations. There are certain requirements for subchapter S filing, including less than 75 shareholders and filing of the election within a specified amount of time after incorporating.

 

Limited Liability Company (LLC)

An LLC is a cross between a partnership and a corporation in that it combines the "pass-through" treatment of a partnership with the limited liability accorded to corporate shareholders. Like limited partnerships and corporations, an LLC is recognized as a separate legal entity from its "members." However, unlike a corporation which can have as few as one shareholder, most states require that an LLC consist of two or more members (owners). Recently, however, more states are allowing single-member LLCs. Please note, however, that the IRS may treat a single person LLC differently than an LLC with more than one member.

The owners of most small LLCs participate equally in the management of their business. This type of management structure is called "member management." Other LLC's use an alternative management structure called "manager management," where the members elect managers to run the company. The nonmanaging owners simply sit back and parttake in LLC profits. In a manager-managed LLC, only the named managers get to vote on management decisions and act as agents of the LLC. Choosing manager management, however, can complicate securities issues for your LLC.

309 W Washington #350 | Chicago, IL 60606 | Tel:(312)917-1107 | Email: pjrcpa@ameritech.net