Corporations
Forming a corporation is one of the most valuable
and versatile steps you can take in promoting your
financial well-being. The number one reason for
forming a corporation is protection from personal
liability.
Incorporating your business separates your
corporate assets from your personal assets so your
personal assets are usually not at risk. Starting a
new business venture is always risky. Many variables,
some of them out of your control, affect the outcome.
A failure can be very draining to your hard assets and
capital. By incorporating, you separate your personal
assets from those of your business, and thereby
normally shield any assets that are not part of your
business, such as your home, car, personal bank
accounts, etc.
Incorporation enhances the sense of stability and
permanence. Many businesses start with one person and
grow. No matter how large or small your business, you
will have a confidence-building corporate presence.
Consulting, franchises, long-standing hobbies have
all been the basis of profitable full- or part-time
businesses. (But where there is the potential for
reward, there is the possibility of risk.)
Incorporation positions your fledgling company for
entrepreneurial success and it may also shield your
personal assets from risk.
Substantial tax benefits may result from
incorporation. Among the areas positively affected are
personal and corporate taxes and asset ownership.
(Safe deposit boxes, bank accounts, and boats are among
the many assets that may be held by corporations.)
A Delaware corporation is an extremely flexible
tool for organizing your company and its assets
favorably. A Delaware incorporation may provide an
optimal legal structure no matter where it is located,
the type of business conducted or the size of the
company.
The benefits of incorporation vary from state to
state. Delaware is nationally recognized as "The
Corporation State." Over 50% of the Fortune 500
companies are incorporated in Delaware. Delaware is a
"corporation-friendly" state. Delaware offers a
favorable system to maximize the benefits of
incorporation to a small businessman. It is your legal
right to incorporate; no special status is needed.
Some of the many advantages of a Delaware
corporation are:
- There is no minimum capital requirement to form
a Delaware corporation.
- Your identity, as owner, may remain anonymous.
- Delaware is organized to process your
corporation economically and efficiently.
- Annual meetings of Delaware corporations may be
held outside the state of Delaware.
- A Delaware corporation may keep all of its
books and records outside the state of Delaware.
- Delaware courts are regarded as fair when
interpreting corporate laws.
- The franchise tax compares favorably with other
states.
- There is no Delaware corporate income tax for
companies conducting business outside the state.
- There is no Delaware tax on non-resident
stockholders who do not do business in Delaware.
- In most cases, Delaware has no sales, personal
property, or intangible property tax on corporations
that do not do business in Delaware.
- Indemnification and personal liability
protection of the directors and officers of your
corporation are permitted.
