What is a corporation?
A corporation is a legal entity that exists separately from its owners. Creating a corporation requires the proper completion and processing of Articles of Incorporation be submitted to the Arizona Corporation Commission for approval (fees apply). Once approved, the articles must be published in a newspaper and the process of “breathing life into the company” is completed. Lanick will assist you with all three steps!
Do I need an attorney to incorporate?
No, an attorney is not a legal requirement. You may prepare and file the articles of incorporation yourself; however, you should understand the requirements and proper processing of documents. You can use our service to incorporate and save money on attorney fees, time and headaches. If you are unsure as to whether an incorporation will benefit your business you may want an initial consultation with an attorney or accountant. Don’t have a attorney or accountant? No problem * contact us today for a free referral.
What should I name my corporation?
Choose your company name carefully. What image are you trying to convey? What do you want your customers to remember? By Law the name you choose must not be “deceptively similar” to any existing company and “distinguishable on the record” at the Arizona Secretary of State.
What are the advantages of incorporation?
There are so many advantages to incorporating your business. First and foremost is the limited liability protection of your personal assets from lawsuits or creditors. Incorporating helps separate your personal assets from that of your business assets. This means the, shareholders, officers and directors, are not liable for the debts and obligations of the corporation, therefore, creditors will not come knocking at your door to pay debts of the corporation or hold you personally responsible in a corporate lawsuit (provide the suite was not a result of an unlawful act on the behalf of an officer / director / shareholder). In other words maintaining limited liability requires shareholders and directors follow all the government rules and guidelines, including, but not limited to holding annual meetings and maintaining meeting minutes, Lanick offers all these documents in one easy to manage and use corporate records book.
Other advantages:
- Perpetual Existence A corporation’s life is not dependent upon its members. A corporation’s life is unlimited. If an owner dies or wishes to sell his or her interest, the corporation will continue to exist and do business.
- Investments and Benefits Retirement funds and qualified retirement plans (like 401k) are more easily setup with a corporation.
- Transferability of Ownership – Ownership of a corporation is easily transferable.
- Sale of Stock Capital can be raised through the sale of stock. Additionally, many banks, when providing a small business loan, want the borrower to be an incorporated business.
- Establishing Credibility – Forming an corporation may help a new business establish credibility with potential customers, employees, vendors, and partners.
- Central Management – A corporation possesses centralized management. Typically, the board of directors will manage the company. The board will select officers to run the company. In a small business setting with one owner, this person will be a director, an officer, and an owner.
- Limited Liability – Corporations provide limited liability protection to its owners. Typically, the owners are not personally responsible for the debts and liabilities of the business; thus, creditors cannot pursue owners’ personal assets (such as a house or car) to pay business debts. Conversely, in a sole proprietorship or general partnership, owners and the business are legally considered the same and personal assets can be used to pay business debts.
- Tax Advantages – Corporations often gain tax advantages such as: the deductibility of health insurance premiums paid on behalf of an owner-employee; savings on self-employment taxes, as corporate income is not subject to Social Security, Workers Compensation and Medicare taxes; and the deductibility of other expenses such as life insurance. For information on the types of tax advantages your business may gain by forming as a corporation, please speak with an accountant or tax advisor.