The Formation Of A Corporation

As a hybrid of partnerships and corporations, LLC’s provide limited liability for debts and flexibility to be taxed as a partnership or corporation (Staring and Naming a Business Presentation, 2012, Slide 5). Some specific advantages include being empowered authorities in the management of the business, diversity of members, limited liability, pass-through taxation, and less paperwork (appreciated by many). A drawback of this business structure is the need for a tailored operating agreement that specifies the specific needs of the

• LIABILITY – Stockholders personal assets are not subject to claims of creditors. The corporation itself is responsible for its actions and liabilities. • INCOME TAXES – Shareholders in a corporation are subject to “double taxation” as in first the corporation is subject to corporate taxation, then money is paid out in dividends. Which then is taxed again as personal income tax. • LONGEVITY - The life of a corporation is limitless as

5. (TCOs 1, 2, 8, 9, and 10) One of your best individual clients is thinking about starting up a new business, and he is seeking your advice on which business form he should select. In particular, he’s trying to decide whether to operate the business as a partnership or a C corporation. Explain to him the significant tax and nontax issues that will arise from choosing each of these entities compared to the other, including how

1. Describe the basic features that distinguish the four basic forms of business ownership: sole proprietorships, general partnerships, C corporations, and limited liability companies.

• Longevity and Continuity: S- Corporation is similar to the C- Corporation that even after the death of the founder will continue. Corporation can be dissolved by shareholders or a court order.

LIABILITY- The same as a C-corporation, shareholders of S-corporation have limited liability. In the case of bankruptcy they only lose their shares of the corporation.

Liability: Ownership of a C-Corporation is vested in its stockholders, whose liability is limited to the amount of their investment. The Corporation is liable for all of its debts, and for the actions of employees acting as agents of the organization. Creditors may lay claim against corporate assets, but cannot reach stockholders’ personal assets. Additionally, stockholders have no claim against corporate assets.

Also be obliged to pay taxes and dealt with civil and little acts of criminal penalties perform through agents. “The corporation is governed primarily by the statutory guidelines of the state statute that provides for its creation. The requirements for the creation and management of a corporation vary somewhat between the states, but as is usually the case, there are common threads that can be found in the corporate statutes of all states.” (Rogers,

Instructions: You should prepare a legal memorandum to your client providing tax advice on the proposal set forth here. Be sure to include citations to code sections, regulations and other authorities that you rely upon in reaching your conclusion. The paper generally runs about two to three pages and is due the last day of class or May 10, 2011..

Delaware required that the name must contain the word of abbreviation of Corporation, incorporation or company. It also requires a minimum of one director that are not required to reside in Delaware and the completion of a Certificate of Formation. It is not required to include the names and addresses of the directors on the certificate. However, authorized shared shares, par value and the information of the registered agent must be listed. Additionally, the state

A Corporation can be defined as a legal creation, however the corporation itself, would only exist on a piece of paper. A corporation will never die a natural death like humans die naturally, and corporations will always outlive the individual who created it. With that said, the corporation itself is never really committed to any employee or committed to any neighbor. However, a corporation can always demand employees, a corporation can always demand taxes that are extremely high, and a corporation can also restrict environmental laws. Corporations hold a great deal of power in today's society.

This memo is about providing to Smithson’s family a summarized and explanatory paper that will advise them regarding their will to create a business, which will be able to grow steadily and feasibly expand globally. Due to the nature of their invention, which is a revolutionary widget, this is a viable and feasible option that has to be taken seriously. Gloria

In order for an informed decision to be made in regards to appropriate business structure for any business it is necessary to understand each business structure separately and any attempt to understand business structure must consider the C-corporation as a baseline against which to compare subsequent business structures. A C-corporation is a business organized as a separate entity from the owner or owners of the business that requires the observation of certain formalities. In Texas these formalities include adopting bylaws, maintaining a record of accounts, issuance of stock, recording the issuance and transference of stock, recording minutes of board of director and shareholder meetings, as well as maintaining a record of current and past shareholders (Tex. BOC § 21). It is important to remember that corporate formalities will require time and expense to maintain and every attempt should be made to comply with these requirements to protect the liability limitation of the corporation’s shareholders, officers, and owners.

Corporations are a different type of business. They are more complex to start because more paperwork is involved and the corporation generally has to be registered at the state level. An ordinary corporation is formed through the articles of incorporation. These corporations are legal entities, and therefore bear legal responsibility. The shareholders of the corporation do not bear legal liability. In addition, corporate income is taxed differently it does not flow through to the owner's personal income tax statements. The

Corporation origin from the Latin word Corpus which means body. It is formed by a group of people and has separate rights and liability from those individual. In any means, corporation exists independently from its owner and this principle is called the doctrine of separate personality. Doctrine of separate personality is the basic and fundamental principle in a Company Law. This principle outline the legal relationship between company and its members. Company’s assets belong to the company not the shareholders as assets are the equity for creditors. Company must use up all its assets to pay off the creditors if it became insolvent. The same applies to the corporation’s debts. For limited liabilities company, the shareholder liability is limited which means that the shareholder is restricted to the number of shares they paid and not personally liable for the corporation’s debts. If the company does not have enough equity to pay off debts, the creditors cannot come after the shareholders. However, limited liability company can be very powerful when in hands who do fraud and on defeating creditors’ claims. Courts then can ignore the doctrine for exception cases and lifting the corporate veil. Lifting the corporate veil is a situation where courts put aside limited liability and hold a corporation’s shareholders or directors personally liable for the corporation’s debts.