Incorporate your Delaware corporation in
one of several popular forms or form your Delaware Limited
Liability Company. For example, there are:
Professional Corporations, also known as "PCS",
Public Corporations; Not-for-Profit Corporations, and S corporations, also known as Closely-held Corporation and General
Corporation, better known as the "C" Corporation.
There are several types of corporations from which you may choose when you incorporate your business in the State of Delaware. Perhaps the most popular type is the so called "S" corporation, also known as the General Corporation, and the "C" Corporation. Although LLC is a relatively new type of an incorporation, many businessmen choose to register their business as a Delaware Limited Liability Company. When you form LLC company, you as the owner, will have your personal assets protected from the debtors of your LLC company. Headquarters of your company do not have to be in Delaware, you do not have to keep your corporate books in Delaware and you may be able to benefit from some tax laws in US or in the case of an International LLC in your own country.
GENERAL OR "C" CORPORATIONS:
General or "C" Corporations are legal entities
- judicial persons created by the Legislature through the
incorporating laws of the State of Delaware. Like natural
persons, General or C Corporations can enter into contracts,
conduct business, own assets, be taxed, pay taxes, sue and
be sued. These corporate forms also protects their owners'
assets from personal liability, by separating directors' and
shareholders' personal property from the corporate assets.
Owners and directors do not pay the taxes of the corporation.
However, they do pay taxes on the dividends that they receive
from their "C" Corporations - an example of the
so called "dual taxation", where the "C"
Corporation also pays taxes on dividends.
Directors/Owners must be diligent, strict and exact in following
the rules prescribed by the law. For your convenience some
of these rules are listed below. For example, they (directors)
must hold their corporate meetings, have minutes from their
meetings, and make sure that all the necessary and required
documents are filed on time.
"S" CORPORATION:
"S" Corporations are General or C Corporations which are converted to an "S" Corporation form,
after the General or "C" Corporation has been formed,
to avoid "dual taxation," and for certain, qualified
small corporations.
Advokat LLC can assist you in obtaining "S" Corporation
status. Owners and directors of "S" Corporation
remain anonymous at all times. Upon successful change to an
"S" Corporation, both the profits and losses from
the business will flow directly to the owners, thus eliminating
"double taxation".
Drawbacks of "S" Corporations:
• "S" Corporations may have somewhat more
limited tax deductions;
• The number of Shareholders in "S" corporations
are limited;
• "S" Corporations may have only one class
of stock;
• "S" Corporations may NOT own
other corporations; and
• "S" Corporation Shareholders MUST
BE US CITIZENS.
