Company Incorporation in the US

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Star Legal is pleased to offer the registration and administration of corporations incorporated in the United States of America. Among the most popular are C corporations and LLCs. As follows we will describe them individually.

 C Corporations

It refers to any corporation that, under the federal income tax law of the United States of America, is taxed separately from its owners. C Corporations are distinguished from S Corporations, which are generally not taxed separately. Most major companies (and many smaller companies) are treated as C corporations for federal income tax purposes in the USA. C Corporations have no limit on the number of shareholders, foreign or national. Any distribution of the profits of a C corporation is treated as a dividend for the purposes of the United States income tax. Exceptions apply to treat certain distributions as made in exchange for shares rather than as dividends. Such exceptions include distributions in full termination of a shareholder interest and distributions in the liquidation of the corporation.

Limited Liability Company (LLC)

An LLC is a flexible form of business that combines elements of partnership and corporate structures. It is a legal form of company that provides limited liability to its owners in the vast majority of jurisdictions in the United States. The main feature that an LLC shares with a corporation is the limited liability and the availability of income taxes. It is often more flexible than a corporation, and is ideal for single-owner companies.

 Incorporation process

Articles of Incorporation (also called Statutes or Certificates of Incorporation) are filed with the appropriate state office, listing the purpose of the corporation, its principal place of business, and the number and type of shares. A registration fee must be paid, which generally ranges from $25 to $1,000, depending on the state.

Generally, there are also corporate statutes that must be filed with the state. The bylaws describe a number of important administrative details, such as when annual shareholder meetings will be held, who can vote, and how shareholders will be notified if an additional "special" meeting is required.
 

A corporation has a different name and is generally made up of three parts: "distinctive element", "descriptive element" and a legal ending. All corporations must have a distinctive element and, in most filing jurisdictions, a legal ending to their names. Some corporations choose not to have a descriptive element. In the name "Tiger Computers, Inc.", the word "Tiger" is the distinctive element; the word "computers" is the descriptive element; and the "Inc." is the legal end. The legal ending indicates that it is, in fact, a legal corporation and not just a registry or trade association. Incorporated, limited, and corporation, or their respective abbreviations (Inc., Ltd., Corp.) are possible legal terminations in the USA.

Legal benefits

Protecting personal property is one of the most important legal benefits against creditor claims and lawsuits. The sole proprietors and general partners of a corporation are personally and jointly responsible for all of a company's responsibilities, such as loans, accounts payable, and lawsuits. However, in a corporation, shareholders, directors, and officers are generally not responsible for the debts and obligations of the company. They are limited in liability to the amount they have invested in the corporation. Both corporations and limited liability companies (LLCs) may have assets such as real estate, cars, or boats. If a shareholder in a corporation personally participates in a lawsuit or bankruptcy, these assets may be protected. A creditor of a shareholder of a corporation or LLC may not confiscate the assets of the company. However, the creditor can seize the corporation's property shares, as they are considered a personal asset.

Transferable Property

The property of a corporation or LLC is easily transferable to others, either in whole or in part. Some state laws are particularly favorable to businesses. For example, the transfer of ownership in a Delaware incorporated corporation is not required to be filed or recorded.

Taxes

In the United States, corporations pay taxes at a lower rate than individuals. Additionally, they can own shares in other corporations and receive corporate dividends 80 percent tax-free. There are no limits on the amount of losses that a corporation can carry over to subsequent fiscal years. A sole proprietorship, on the other hand, cannot claim a capital loss greater than $3,000 unless the owner has offset the capital gains.

Durability

A corporation is capable of continuing indefinitely. Its existence is not affected by the death of shareholders, directors or officers of the corporation.

Credit rating

Regardless of an owner's personal credit ratings, a business can acquire its own credit rating and create a separate credit history by applying for and using corporate credit.

Corporation Owners

A corporation is generally owned and controlled by its members. Members are known as shareholders, and their share in the ownership, control, and profits of the corporation is determined by its share of shares.

The day-to-day activities of a corporation are generally controlled by persons appointed by the members. In some cases, this will be a single individual, but more commonly, corporations are controlled by a committee or by committees. Generally speaking, there are two types of committee structures. A single committee or board of directors is the preferred method in most common law countries. The board of directors is made up of executive and non-executive directors, which are responsible for supervising the management of the company's incorporators.

Corporate Structure
The corporate structure consists of several departments that contribute to the mission and general objectives of the company. The marketing department is considered by some business professionals as the most important entity in the corporate structure. Without this department, sales or new customers cannot be done. The finance department is also vitally important as it is responsible for acquiring the capital used to run an organization. Other segments of the corporate structure may consist of the accounting department, the human resources department, the IT department, and the operational aspect of the particular company. These six main corporate departments represent the main management resources within a publicly listed company; although there are often smaller departments within the main segments or autonomously.
 

Another way to define a corporate structure is through business divisions. A division of a business is a different part of the company; however, the company is legally responsible for all the obligations and debts of each division. In a large organization, various parts of the business may be managed by different subsidiaries, and a business division may include one or more subsidiaries. Each subsidiary is a separate legal entity owned by the parent company or another subsidiary in the hierarchy. Often a division operates under a separate name and is the equivalent of a limited liability corporation or company that obtains a fictitious name or a certificate of "doing business as".
 

Advantages of corporations

Unlike a partnership or sole proprietorship, the shareholders of a modern business corporation have limited liability for the debts and obligations of the corporation. As a result, your losses cannot exceed the amount you contributed to the corporation as installments or payment of shares. This allows corporations to socialize their costs. To socialize a cost is to spread it to society in general. The economic reason for this is that it allows anonymous trading of the corporation's shares by eliminating the corporation's creditors as an interested party in such transaction. Without limited liability, a creditor would likely not be able to sell any stock to a buyer at least as solvent as the seller.
 

Limited liability reduces the amount that a shareholder can lose in a company, thus allowing corporations to raise large amounts of financing for their companies by combining funds from many stock owners. This increases attraction to potential shareholders and increases both the number of willing shareholders and the amount they are likely to invest.
 

Another advantage is that the assets and structure of the corporation can continue beyond the life of its shareholders and bondholders. This allows for the stability and accumulation of capital, which is then available for investment in larger and more durable projects than if corporate assets were subject to dissolution and distribution. This was also important in medieval times, when land donated to the Church (a corporation) would not generate the feudal fees that a lord could claim for the death of a landowner. 

However, a corporation can be dissolved by a government authority, ending its existence as a legal entity. But this usually only happens if the company breaks the law.  For example, if it does not meet the annual filing requirements or, in certain circumstances, if the company requests dissolution.

It will be a pleasure for us to assist you in the process of incorporation and administration of a corporation in the United States of America.