The ease of forming a corporation online has gotten much easier with the usage of online legal documents. Typically, most businesses avoid the corporate structure because they associate a corporation with complicated legal documents, stockholders, and double taxation. However, now more than ever a corporation is a great alternative for small businesses who simply seek to protect themselves and their assets. Forming a corporation online seems like a better and better proposition to anyone under a FBN, DBA, or LLC company organization.
A corporation, first and foremost, forms a separate entity from the business owners. This entity will protect the owners from any lawsuits or other personal liability issues that arise during the course of business. Obviously, no one wants or expects these things to happen, but they can occur at any time. The landscape of small businesses is strewn with lawsuits and bankruptcies that could have been avoided by investing a few hundred dollars in the future. No matter what industry you are in, you can and must expect the worst to happen and plan accordingly.
The downsides to a corporation are typically the reason that many small businesses shy away. From personal experience, the thoughts that immediately run through your head are complicated tax forms, double-taxation, and a very high cost of lawyer fees. Well, now that the articles of incorporation can be purchased online, the cost has dwindled to anywhere between $300 or $500 dollars for a basic formation of corporation. This is a huge improvement from the days of spending thousands of dollars to have a lawyer hand draft the articles of incorporation for your business.
Additionally, while forming a corporation online, a small business owner can choose to apply for S-Corporation status, which eliminates the double taxation with a special exemption. The S-Corporation status requirement is that the business has less than 100 shareholders. The one drawback that still remains, however, is the complicated tax forms. Most people wait until the start of the new year to file for corporation online in order to lessen the complications of taxes. If a business files for corporation status in the middle of the year, they will have to file two separate tax returns for each type of business entity. For people who already use experienced tax professionals this is not a huge change, but for those who prefer to do their own taxes it could be an unnecessary complication.
Filing for corporation status online is an important step for every developing business, and now it is easier and cheaper than ever. The advantages far outweigh the drawbacks for almost any situation.
This information is for general purposes only. All that we do is submitted and performed with the understanding that we are not engaged in rendering legal, accounting or other such professional service. If legal advice or other expert assistance is required, the services of a professional should be sought.
