Frequently asked questions (FAQ)
These pages are constantly being upgraded to help assist you in whatever questions you may have regarding Corporate definitions and our services. Please see Corporation Definitions and Attributes, for defined subject matter.
- What are the benefits of incorporation?
- Does incorporation require extensive paperwork?
- Should I incorporate in Nevada or Wyoming?
- What is a Registered Agent and what services does one provide?
- Why do I need office identity or a telephone number in Nevada?
- What are the annual filing requirements of a Nevada corporation?
- How many directors and officers are required to form a corporation?
- Who owns and controls the corporation?
- What is a 'C' corporation?
- What is an 'S' corporation?
What are the benefits of incorporation?
Incorporation provides many benefits to business owners. One of the primary benefits is asset protection. As owners of a corporation, shareholders' liability is limited to the amount invested or capitalized to organize the corporation. For example, creditors of your corporation must generally satisfy their claims by seizing assets of the corporation rather than the personal assets of the shareholders. In contrast, as a sole proprietor or partner in a general partnership, you are financially responsible for all liabilities of the business, and your personal assets are subject to seizure or lien by creditors.
Those persons desiring to conduct general trading activity, real estate development, or other business ventures may choose incorporation as an effective investment vehicle for such activity. Incorporation provides the structure to take advantage of generally accepted accounting principles to reduce tax exposure.
Incorporation also provides a method to retain anonymity as a business owner since shareholders of a corporation are not generally publicly registered. Furthermore, incorporation provides a greater opportunity to raise capital for the business through issuance of stock (certain restrictions apply).
Does incorporation require extensive paperwork?
No. When electing to utilize our Incorporation services, we undertake preparation of the Articles of Incorporation, Acceptance of Resident Agent, List of Officers, and any necessary records and resolutions to maintain compliance with the State of Nevada. Our professional services may also be utilized to obtain the federal tax identification number to establish corporate bank accounts. The Purchase Order forms contain all of the information necessary to establish your entity in the State of Nevada. We can also assist with establishing a limited partnership, limited liability company, or offshore corporation.
Why should I incorporate in Wyoming or Nevada?
There were numerous advantages to incorporating in the State of Nevada, the new state fees have made it very difficult to justify the benefits. We therefore now recommend Wyoming as the preferred state of incorporation. Probably the most compelling reason to choose Wyoming over Nevada is the annual fee which in Wyoming is $50 and Nevada $650 the benefits are the same i.e. both states imposes no state income taxes or annual financial returns. Also, the Secretary of State only requires minimal annual reporting; which is limited to submitting the name(s) and address(es) of the person(s) holding the position of Officer or Director. (As your Registered Agent we provide assistance to ensure annual compliance.) Additionally, the both states impose restrictions on the place, time, or frequency of stockholders' or directors' meetings. Another important factor when choosing the jurisdiction in which you wish to incorporate is the anonymity protection afforded to the shareholders. Both states do not require the name(s) and address(es) of the shareholder(s) to be publicly filed. However Wyoming does share information with IRS, therefore we provide a domicile in Nevada so the entity information is not shared.
What is a Registered Agent and what services does one provide?
The term 'Registered Agent' means the agent (natural person or legal entity) appointed by the corporation, limited partnership, or limited liability company upon whom process or a notice or demand authorized by law to be served upon the corporation may be served. The Nevada Revised Statutes require that corporations, and other such legal entities, retain the services of a Resident Agent who must have a street address for the service of process. The street address of the Resident Agent is the registered office of the corporation in the State of Nevada. We offer these services by qualified representatives in each state of incorporation.
Why do I need Office Identity or a telephone number in Nevada?
Why have an office identity? Let's begin with "Domicile" which means "Primary Residence." Confusion begins with the "Articles of Incorporation." In simple terms, this is a birth certificate, which of course has nothing to do with residence. Then the term "Registered Agent," which is defined as "agent for accepting legal service." This also has nothing to with the residence of the business. The residence of an individual or an entity is based upon their paper trail which proves their address (i.e. utility bills, bank account, IRS address, etc.) A Post Office Box or PMB is not a legitimate address. Resident agents who forward official mail are not a legitimate address. Only at a company designated with the correct business licenses at the location's facilities and with U.S. Post "mail drop" designation may a specific address designation be issued for a legitimate address. See Office Identity for more information. Back to top
What are the annual filing requirements of a Nevada corporation?
Nevada corporations must file an annual List of Officers with the Secretary of State setting forth the name(s) and address(es) of the person(s) holdings the offices of President, Secretary, and Treasurer as well as those serving on the Board of Directors. (The names of the shareholders are not subject to public registration.) Limited Partnerships and Limited Liability Companies have similar annual reporting requirements.
The State of Nevada does not impose income taxes, and as such, an annual financial return is not required. The State does now require the registration of a Nevada Business License fee for corporations pay a minimum of $500. Corporations must, however, file an annual federal tax return (IRS Form 1120) with the US Department of Treasury. Limited Partnerships and Limited Liability Companies have similar requirements, please contact Inc Legal Services. for further details. Back to top
How many directors and officers are required to form a corporation?Nevada Revised Statutes require at least one natural person to serve as director of the corporation. The same person may hold the offices of President, Secretary, and Treasurer and may be the only person appointed to the Board of Directors. The name(s) and address(es) of the Person(s) holding said offices or appointed to the Board of Directors must be filed with the Secretary of State annually. The Officers and Board of Directors are appointed by the shareholders of the corporation. The shareholders ultimately decide the course of action of the corporation.
If you desire to retain a higher level of anonymity, you may wish to utilize our Director Services. Inc Legal Services. will provide your corporate entity with an Officer to serve in the positions as required by the Nevada Revised Statutes. The name and address of the Director will be filed annually with the State of Nevada on behalf of the corporation. Additionally, the Director will be utilized to obtain the tax identification number for your corporate entity. When submitting the application for a tax identification number to the US Department of Treasury, the President of the corporation must provide their name and social security number (or proof of foreign status). While you may elect to use the Director Services, you will remain responsible for the daily operation of the corporation. This is generally substantiated through resolution (Appointment of Operating Officer) or power of attorney.
Who owns and controls the corporation?
The corporation is owned by the shareholders, who may be domestic or foreign natural persons or legal entities. In general, since the shareholders appoint the Officers and Directors, the corporation is controlled by the shareholders. The name(s) and address(es) of the shareholder(s) are officially recorded in the stock ledger which is typically maintained by the Resident Agent or an Appointed Custodian.
The "C-Corporation" designation merely refers to a standard, general-for-profit, state-formed corporation. To be formed, an Incorporator must file Articles of Incorporation and pay the requisite state fees and prepaid taxes with the appropriate state agency (usually, the Secretary of State -- Corporations Division).
An S corporation is a standard C Corporation that has had an S filing form completed to the IRS. There are several reasons for filing an S corporation, double taxation normally is not one of them! For more read Corporate definitions and attributes.
Inc Legal Services