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ravenrose
10-27-2009, 01:38 PM
Hello all. I'm glad to have joined the forums. I was seeking advice on business matters. I've been always wanting to start up a business since forever. I have been working on my plans for several months and want to start my business for the new year. For those who operate C-Corporation structure, I'd like to know what do you guys put down as Director(s) of Corporation, President, Treasurer, Secretary and Officer(s) positions if there's just two people involved at this time but may expand in the future if the business takes off? Do I have to name all shareholders? Do you use yourself as Registered Agent or choose someone else if you're conducting your business in state?

Regarding fees: once you incorporate, is it one time thing or what fees that has to be paid annually (ie: in state filing)? Besides taxes and local business fees, that is. Also, corporate minutes has to be maintained as well?

Which incorporation provider do you use? I was referred to LegalZoom because it includes a package that is handy for anyone who incorporates. I also heard of Nolo and BizFilings. What's your preference?

Thanks for all of your feedback on this. I wish you all continued success in your endeavors. :)

Business Attorney
10-27-2009, 05:26 PM
First, corporate law varies from state to state, so without knowing your specific state, be aware that the answer could be different.

In most states, if not all, you can name the same person to multiple offices. Many states used to require that the President and Secretary be different people, but that requirement has generally been removed.

As long as you have a physical address in the state of your incorporation, you can be your own registered agent. There are some advantages to having another party such as your attorney or a professional registered agent company act as registered agent, but there is no need to do so in many cases.

As far as I know, every state requires an annual filing and annual fees.

Yes, maintaining corporate minutes are critical, even if you are the only shareholder and the only officer. Failure to do so can lead to piercing the corporate veil (http://www.illinoisbusinessattorney.com/articles/piercing_veil.html).

Before you use a filing service, you should check out your secretary of state's website which you can find easily by searching online or by looking at this list of state filing offices (http://www.limitedliabilitycompanycenter.com/states.html) (the list says it is for LLCs but the filing offices for corporations and LLCs are the same). In many cases, you can file online and pay by credit card, saving you a considerable amount of money.

As a caveat, I would like to caution you that choosing between a C corporation, an S corporation and an LLC is not as simple as it seems. Neither the filing services like LegalZoom nor the state filing offices will give you legal advice based on your specific facts and which takes into account the goals and expectations you set for your business. Having an attorney meet with you and make recommendations often costs less than you would expect and is the only way to get legal advice that is geared to your own situation.

Evan
10-30-2009, 12:18 AM
As a caveat, I would like to caution you that choosing between a C corporation, an S corporation and an LLC is not as simple as it seems. Neither the filing services like LegalZoom nor the state filing offices will give you legal advice based on your specific facts and which takes into account the goals and expectations you set for your business. Having an attorney meet with you and make recommendations often costs less than you would expect and is the only way to get legal advice that is geared to your own situation.

To add a shameless plug for accountants as well...

Granted there are tax attorneys out there, or those who have had a background in accounting... but speaking to a CPA may also be beneficial as there are a variety of tax strategies based on each entity. Plus each entity may yield some unique benefits that may sway you. Perhaps consulting with an attorney first may be best, but call the accountant second. You should be able to get a free consultation with both of them, and in the long run, you may save yourself from a lot of legal headaches.

Sure, you're going to pay more than the $99 for this service, but it will be done right. Or else you have somebody to go after if things were wrong.

Business Attorney
11-01-2009, 12:32 AM
I agree with Evan that many lawyers are not necessarily strong on tax, but based on my experience I would caution you that there are also some accountants that are great at setting up books and accounting procedures but are not strong on tax either. That's not a dig on accountants or on attorneys, as I happen to be both a CPA and a lawyer (although I only practice the latter). The take-away from both our comments is that you need someone who IS knowledgeable about the choices you need to make, from both a tax and legal standpoint. Hopefully that describes BOTH your lawyer and your accountant. And even if your attorney does know tax issues well, you should still consult an accountant.

Evan
11-01-2009, 12:46 AM
...but based on my experience I would caution you that there are also some accountants that are great at setting up books and accounting procedures but are not strong on tax either.

Yes, there are a lot of CPA's who are not strong on tax either. I know a few who hate taxes and would refer you to somebody else.

For those wondering who would do that -- these individuals usually focus on assurance (e.g. auditing) services or other specialties (e.g. fraud, valuations, etc.) Taxation is another ball of wax!

And yes, every so often, you come across a attorney who is also a CPA, and that certainly a nice combination. But some attorneys don't even know how to manage their own books, so asking them a tax question is probably not the best idea! Hopefully they are willing to admit that you should seek the advice of an accountant and not try to "wing" it.

And accountants don't practice law, so if your question includes "Is it legal..." or "Does the law...", you may want to seek an attorney EXCEPT as it may relate to tax laws.

sabra
01-18-2010, 05:28 AM
Hi,

I agree with the posts above. Ultimately, you should speak to both a lawyer and an accountant to ensure that the correct corporate structure is set up for you, from both a legal and accounting end. For many small businesses starting out, an LLC can be beneficial from a tax perspective as it is a flow-through vehicle, however, the lawyer/accountant will look at your particular circumstances, tax situation, State in which you want to incorporate etc and advise you on how best to structure your business. It is truly important to do this at the outset of starting out. It is a mess and a headache to try to ‘fix’ it up later, after starting with the wrong corporate structure. I would not be tempted to try to read up and decide on the right structure yourself – quite complex tax/accounting/legal issues underlie different corporate structures. Best to spend a few hundred dollars, and get it set up properly upfront.

As a starting point, I would recommend giving one of the large company that registers corporations a call and ask your preliminary questions. I use NCR and they’ve always been good to me - NCR - National Corporate Research Home Page (http://www.nationalcorp.com/). You can call them and ask to speak to a representative and just spend 15 mins asking them your questions/issues etc. This will give you some good background knowledge before you speak to a lawyer and accountant. That way, your discussions with the lawyer/accountant may be quicker and more productive for you as you have a little knowledge already.



Here is a good article that I found online that gives a pretty good overview of the different type of structures to use, and the reasons/differences for them.

Differences in Legal Structures ? Which Structure is Right for You? - Business Law Advisor - Community Home (http://community2.business.gov/t5/Business-Law-Advisor/Differences-in-Legal-Structures-Which-Structure-is-Right-for-You/ba-p/2253)



Sabra Easterday
MatchB2B, LLC
Business Bidding Platform (http://www.matchb2b.net)


Disclaimer: Notwithstanding that I am a lawyer, the above is not legal advice and no attorney-client privilege exists. You must seek your own independent legal advice.

Evan
01-18-2010, 02:32 PM
The above is not legal advice and no attorney-client privilege exists.

Even if it was legal advice, no attorney-client privilege exists when you AREN'T a client, and certainly not when you're posting it on a public forum. :)