Should I incorporate my business?
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| The most important reason to incorporate is that it limits your personal
liability. For this reason it is considered an essential element to starting a new
business. In today’s business environment it makes sense to protect your personal
assets from those who may wish to bring a lawsuit against your company. Top of Page
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Do I need an attorney to handle
my business formation?
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| It is not necessary to employ the services of an attorney to form your
corporation or LLC. You can legally file the formation documents on your own or through
someone of your choosing who acts as the incorporator or organizer and
who will prepare your documents with the information you provide.
However, we urge anyone who may need more guidance to consult their tax or legal advisor
regarding their business formation. Top of Page
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Why should I use Parcorp to incorporate my
business?
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| Parcorp Services was established to provide complete and affordable formation
services to small businesses. Our Certified Corporate Paralegals and experienced
professionals can provide you with assistance throughout the entire process. We also
provide additional business support services, software, books and other products so your
business can adapt as it grows. We invite you to compare our services and fees to those
offered by other companies. We simply provide a better service at a lower cost. Top of Page
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What exactly is a corporation?
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| A corporation is a separate legal entity from the individuals who own and
operate it. It can hold title to real property, it can borrow money, it can sue or be sued
and enjoys constitutional rights and protections similar to those of an individual. In
order to maintain this separation of the individual owners from the corporation simple
organizational and operating procedures must be followed. Top
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What is the structure of a corporation?
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| The organizational structure of a corporation consists of three levels, namely
Shareholders, Directors and Officers. The Shareholders are the owners of the corporation.
The Directors manage the affairs of the corporation and are responsible for creating and
implementing general business policies of the corporation. The officers of the corporation
handle the day-to-day operation of the business. In most states one individual can act as
the sole Shareholder, Director and Officers of the corporation. Top
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What exactly is a Limited Liability Company?
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| A Limited Liability Company is a unique business entity which combines the
limited liability protection of a corporation with the simplicity and pass-through tax
benefits of a partnership, sole proprietorship and an S Corporation. Like a corporation it is a separate legal entity from the
individuals who own and operate it. Top of Page
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What is the structure of a Limited Liability Company?
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| The members of an LLC are the owners of the business. As a member you invest in
the LLC in exchange for a percentage of ownership interest. Generally the members also act
as the LLC’s managers and are involved in the day to day running of the business,
this is considered a member-managed LLC. In some cases specific managers are designated
to run the business which is referred to as a manager-managed LLC. Top of Page
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What is a Registered Agent?
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| Most states require that an agent be registered with the state to receive
governmental and legal correspondence. The agent must have a physical address within the
State of incorporation and be of legal age. An officer, director, employee or even a
shareholder may act as the registered agent if they meet the above requirements. The
registered agent may also be served legal summonses in a lawsuit and you may want to avoid
having these documents served at the business location or a home residence. For this
reason Parcorp Services offers registered agent services at affordable annual rates. Back to Top
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How much paperwork is involved when I incorporate?
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| To incorporate with Parcorp Services simply complete our on-line order form or
call our office and give your information to one of our agents. We will prepare the
formation documents and forward them to the Secretary of State along with the required
filing fees. The entire process is handled quickly and efficiently so you can concentrate
on your business activities. Top of Page
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How long does the incorporating process take?
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| The time frame for incorporating depends on the state in which you are
incorporating and the type of service you request. With our Expedited Service we can
incorporate a business within three to five business days. Same day service is available
in some states. Standard filing generally takes between three and four weeks. Top of Page
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Where should I incorporate my business?
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| In general incorporating in the state in which the business is located is the
most practical and least costly option for a small business. Other considerations may
include whether or not the business will have multiple locations or if there are any state
laws that apply to your particular business activity. However, we urge anyone who may need
more guidance to consult their tax or legal advisor regarding their business formation. Top of Page
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Is Delaware the best state to incorporate?
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| Many states have revised their corporate laws to include many of the benefits
allowed Delaware corporations. Furthermore, most of the advantages of incorporating in
Delaware apply to large publicly traded corporations. The most notable advantages to
incorporating in Delaware include the following:(I) favorable franchise tax rates, (ii)
nonresident shareholders are not subject to Delaware taxation, and (iii) Delaware courts
liberally interpret corporation laws allowing favorable and more predictable decisions for
corporations. Top of Page
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What expenses will I incur if I incorporate in another
state?
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| You should be aware of the added expenses associated with incorporating and
maintaining a corporate presence in that state. If you incorporate in another state such
as Delaware, you will still need to be authorized or qualified to do business in the state
or states where you will actually be conducting your business. The cost associated with
qualifying in a state is usually more expensive than the cost of incorporating in that
state. In addition, you will be required to maintain a registered agent in the state of
incorporation and may have to pay annually for this service. These expenses can be
eliminated by incorporating in the state where the business will be located. Top of Page
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| How does an LLC compare with a Sub S Corporation? |
| An LLC’s flexibility and ease of operation make it very favorable to small
businesses. An S-Corp, while having similar pass-through taxation benefits, does not
allow for flexible distribution of profits or losses. Further, S-Corps must maintain
statutory corporate formalities. An LLC can have multiple owners, without
restrictions on type or classification, and may offer several different classes of
ownership interest. An S-Corp is restricted to 75 shareholders, with restrictions on type
and classification, and can offer only one class of stock.
While the LLC and S-Corp both provide limited liability protection and similar
pass-through tax advantages, the LLC has far less restrictions or formalities it must
adhere to. For this reason many small business owners are now forming as, and enjoying the
benefits of a limited liability company. We urge anyone who may need more guidance
in choosing which entity is best suited for their business to consult their tax or legal
advisor.
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