Facts you must understand before incorporating

What is the reason to incorporate a business? Well, it is basically about limiting your liabilities regarding business obligations, which is a good aspect, especially when you got plenty of outside contracts.

Benefits of a corporation

The ownership of a corporation is caught in shares that can be transferred easily from one owner to another, a corporation would be a perfect option for someone willing to attract outside investors or even sell the business. And unlike a general partnership or sole proprietorship, corporations can continue to exist even beyond the lives of their founders. Incorporate business registration services can educate you through detailed information.

Can be a bit expensive

Nevertheless, it will cost you money for setting up and dissolving a corporation, and they have recordkeeping as well as annual reporting needs that general partnerships or sole proprietorships don't have. If you have just started your business, such additional obligation may outweigh the benefits of incorporating.

Based on individual situations, a corporation can save money on taxes or can cause to pay more taxes. A qualified accountant can give you suggestions on incorporating tax consequences. If you are certain with your decision to incorporate, you have to ready incorporation articles, filing them with the state. Keep in mind that incorporation rules differ from state to state.

You must have a unique business name

The name of your business needs to be distinct from any other registered business entity. Most states check for the same business names through an online search tool. You can't use any obscene words or the word 'bank' if you are not a financial institution. The name should end with the corporation, incorporated, company, etc.

Specify the number of shares

The shareholders of a corporation own shares of stock in the business. In your incorporation articles, you need to mention the number of shares your company has the authorization to issue. Though, there is no need of listing the shareholder's names. You should keep your internal records, including the name of the shareholders and the number of shares issued to them.

What is US ex-pat tax?

Are you concerned about your U.S. citizens living abroad taxes? If your worldwide income surpasses the filling threshold, you have to file U.S. federal tax return. Though, you can expect an extension on the tax deadline. Even if you move back to the U.S., maybe you can still use ex-pat exclusions and deductions.

In case you miss o consider all the deductions or forget to specify a few incomes on your return, stay calm as you can file n amended return through e 1040X form. It is better to identify the issue and file the amended return before it is spotted by the IRS.

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Created on Apr 19th 2021 01:56. Viewed 272 times.

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