Where Should you Incorporate?
The quick answer is - usually in your own home state.
Why? It's simple - cost. The cost to incorporate as you'll
see is usually only several hundred dollars including
state fees. However, if you incorporate in a state other
than your own and do business in your own state, you must
then "qualify" or file for authority to do business
in your home state.
Why Should you Incorporate? Personal
liability!
When a corporation enters into a transaction, it is
the corporation and not the shareholders who is responsible.
When starting up, a bank may require a personal guaranty
since your company doesn't yet have a credit history
but, as a rule, a shareholder's liability is limited
to the amount invested into the company. Creditors cannot
reach beyond the assets of the company in normal circumstances.
The same is true with lawsuits. It is the corporation
not you who will be sued (assuming the lack of unusual
circumstances such as fraudulent undercapitalization.)
Tax Considerations!
It's true that the potential exists for double
taxation (see What is "pass-through taxation?)
However, you can avoid this with the use of a LLC or
by electing to be treated as an S Corporation. With
the corporate form of ownership, you can usually elect
to implement various tax-free benefits such as life
and health insurance and retirement plans. Transfering
ownership and raising capital are usually easier through
the use of stock. Corporations usually have a perpetual
life as well, distinct from that of the shareholders.
How Long does it Take? Inc Cheap
will process and prepare your Articles of Incorporation
within 24 hours of receipt of your order. If the order
is incomplete, or incorrect we will attempt to contact
you within that time to ask you some questions.
Once the Articles of Incorporation are prepared, most
states require 4-6 weeks to process business formation
documents. Will will typically have the entire process
completed between 20-30 Business days.
What is a Registered Agent/Do
I need one?
Almost every state requires
a Registered Agent or Office for every corporation,
LLC, or Limited Partnership which does business in their
state. This is to ensure that each company has an office
where it may be found, and a person at that office on
whom service can be effected for any notice or process
in connection with litigation. We Recommend
that you elect Inc Cheap as your Registered Agent, but
you are not required to do so. Please note that Registered
Agent information is often published on State Web Sites,
so care should be taken with whom you elect to serve
as your agent.
Why are we so inexpensive?
We are an Incorporation House, and do not give any legal
advice. We encourage you to seek out legal information
and have your questions answered by a qualified legal
professional, and/or Accountant. Once you know what
type of entity to create, we simply do the leg work
for you. In fact, Inc Cheap handles many Business
Formations for Accountants and Legal Professionals in
the 50 States!
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