Corporation info

A corporation is a separate legal entity that can own property, transact
business, and become involved in lawsuits.

The owners of the corporation are called shareholders or stockholders.

Generally, shareholders are not personally responsible for any debts or legal
claims against the corporation, only the corporation itself is responsible. This is
known as the “liability shield.”

YES. Corporations must comply with state laws and pay state fees for both the
creation of the corporation and its continued operation.

That depends on whether it is a C or an S corporation. A C corporation can be
taxed twice on its profits. First, the business pays the corporate income tax.
Then, the stockholders pay dividends tax on the same profits when they are
distributed.

An S corporation pays no tax at the entity level. Designed for small business,
the S corporation passes all its profits and losses directly through to the
stockholders for taxation. Electing S corporation status requires an affirmative
filing with the IRS. S corporation status can provide many tax benefits for a
small business, but significant restrictions apply. Many small businesses are
better off being C corporations. Your accountant should participate in the
decision which is best for your business.

For more information regarding the differences between “S” and “C”
corporations, please request our Corporations brochure.