Corporations
If you're concerned about limiting your personal liability for
business debts, you'll want to consider organizing your business as
either a limited liability company (LLC) or a corporation. (Of
course, you may have other reasons in addition to limited liability
for considering these two business structures.)
This information deals primarily with the small, privately owned
corporation. I'll assume that all of the corporate stock is owned by
one person or a few people, and that all shareholders are actively
involved in the management of the business-with the possible
exception of friends and relatives who have provided seed money in
exchange for stock. Because there are many complexities involved in
selling stock to the public, I don't discuss public corporations.
The most important feature of a corporation is that, legally,
it's a separate entity from the individuals who own or operate it.
You may own all the stock of your corporation, and you may be its
only employee, but "if you follow sensible organizational and
operating procedures" you and your corporation are separate legal
entities.
All states have adopted legislation that permits a corporation to
be formed by a single incorporator. All states permit a corporate
board that has a single director, although the ability to set up a
one-person board may depend on the number of shareholders. In
addition, many states have streamlined the procedures for operating
a small corporation to permit decisions to be made quickly and
without needless formalities. For example, in most states,
shareholders and directors can take action by unanimous written
consent rather than by holding formal meetings, and directors-
meetings can be held by telephone.
- Partnerships
- Corporations
- Sole Proprietorships
- Incorporation Basics
- Naming your Business
- Writing a Business Plan
- Limited
Liability Companies
- Complying with Zoning Laws
- Getting
Licenses and Permits
- Why Form a Nonprofit Corporation?
-
Choosing Between a Corporation and an LLC
- Leases and Rental Agreements: An Overview
