This article brings you through the different millions of the incorporation process. You will learn what information you need to start the process, what are the terms you need to familiarize yourself with, what type of entity you want to choose, where you can join, how to open your corporate bank account and how to plan your taxes .
STATE OF INCORPORATION
The best advice can be to form a corporation in the state where you plan to do business. It will be much less complicated and more profitable in the long run. Here are some of the reasons why Delaware collaborates with large and small companies:
Delaware maintains a separate judicial system for business, called "Chancellery Court". If it is a legal issue that involves a process in Delaware, there is an established record of business decisions. No minimum capital is required to organize the corporation and there is no need to have a bank account in Delaware. Only one person can have all the offices of the corporation: president, vice president, secretary and treasurer. There is no state tax on corporate income in Delaware corporations that do not operate within the state. Stock actions owned by people other than Delaware are not subject to the Delaware personal income tax. There is no tax on Delaware successions charged for non-resident shares.
TYPE OF ENTITY
The most important benefit of a Corporation is that, legally, it is an independent entity of the people who have it or operate and that limits your personal responsibility. If a legal ruling is adhered to the Corporation, you may lose only the money you have invested in the Corporation. In general, whenever you have acted in your corporate capacity (as an employee, official or director) and without the intention of defrauding creditors, your assets can not be used by creditors to satisfy a judgment against your Corporation.
Since the Corporation is separated from its owners, the Corporation pays taxes on net income (profits) that remain after they have paid or accumulated all business expenses. Corporations register form 1120 of the IRS to inform their income, expenses and taxes.
Taxes of the Corporation Tax – 2008
More than the tax no higher than the tax
$ 0 $ 50,000 15%
50,000 75,000 25%
75,000 100,000 34%
100,000 335,000 39%
35,000 10,000,000 34%
10,000,000 15,000,000 35%
15,000,000 18,333,333 38%
18.333.333 .......... 35%
In addition, if the income is distributed to the shareholders in the form of dividends, the shareholders pay taxes on the dividends that receive, at the moment 15%.
Limited Liability Company (LLC)
LLC is the newest form of a business entity. As with a Corporation, the owners of an LLC benefit from limited liability. This means that an LLC member is not normally exposed to the legal liability of commercial debts and legal trials against the business. Normally, if you become a member of the LLC, you risk only the share of capital paid to the business. A member of the LLC may be an individual or an independent entity, such as an association or a corporation that has invested in the LLC. You must create an operation agreement (when forming the LLC) to detail how the business will work. If the LLC has a member, it is treated as a sole proprietor or for tax purposes, otherwise it is an association with each member who reports and pays income tax on his part of the income .
Taxable income: Tax:
Over But not over Tax +% on higher amount
$ 0 $ 8,025 $ 0.00 $ 10 0
8,025 32,550 82,50 15 8,025
32,550 78,850 4,481.25 25 32,550
78,850 164,550 16,056.25 28 78,850
164,550 357,700 40,052.25 33 164,550
357,700 ............ 103,791.75 35 357,700
The main benefit of forming a non-profit Corporation is to obtain a tax exempt status under IRC, Internal Section 501 (c) (3). If a nonprofit benefit has a tax exemption, it is not only exempt from paying taxes on income from your income, but donors contributing to the non-profit organization can make a tax deduction for your contributions. To apply for the status of 501 (c) (3), the non-profit entity must submit form 1023 of the IRS. The legal rule for the tax-free state is that the Corporation has been constituted for religious, charitable, literary, scientific or educational purposes. Generally, nonprofit benefits are managed by a board of trustees or employers that participate in the non-profit organization. The officers and employees are in charge of the daily business of the non-profit Network.
NAME OF THE ENTITY
The name of your entity must contain a valid corporate indicator for the state in which you are incorporating (most of the state accepts one of the following identifiers or an appropriate abbreviation: Incorporated, Corporation, Company or Limited ), and it does not have to match or be too similar to the name of an existing registered company in your desired state.
The official is appointed by the board of directors and responsible for the daily operation of the corporation. The titles and duties of each officer usually appear in the statutes of the company. The common official titles are the president, the vice president, the secretary and the treasurer. An official may be one of the shareholders, owners or employees of the entity. The admin is part of the management of the entity. SHAREHOLDERS / MEMBERS Shareholders: owners of the shares of a corporation. Shareholders do not have specific corporate properties; They have an interest exclusively belonging to the corporation. The shareholder appoints the board of administration of the entity that oversees the direction of an entity (officers): the owners of an LLC. A member can be active in the management of the LLC and he / she will be a member-manager or only an owner and then he / she will be a member.
NUMBER OF TAXAT ID
Tax identification number: for the entity
The federal fiscal identification number, also known as Enterprise Identification Number (EIN), is a number that the federal administration gives to your entity for tax purposes. You can not hire employees or open a bank account in the name of your business without obtaining a business identification number.
Tax identification number: for the owners
For the IRS
What is an ITIN? The individual identification number of taxpayers (ITIN) is a tax processing number issued by the Internal Revenue Service. This is a nine-digit number that always starts with the number 9 and has a 7 or 8 in the fourth digit, example 9XX-7X-XXXX. The IRS issues ITIN to individuals who are required to have an ID number of US taxpayers, but who do not have, and are not eligible to obtain a Social Security number (SSN) of # 39 ; Social Security Administration (SSA). The ITINs emit regardless of the immigration status, as both resident and non-resident foreigners may have the tax return of the United States and the payment liabilities of # 39 ; in accordance with the Internal Revenue Code. Individuals must have a file requirement and submit a federal tax return valid for receiving an ITIN unless they meet an exception.
What is an ITIN for? The ITINs are only for federal fiscal reports and are not intended to serve any other purpose. An ITIN does not authorize work in the United States or provides eligibility for the benefits of Social Security or the Tax Credit for earned income. The ITINs are not a valid identification outside the tax system. The IRS issues ITIN to help people comply with United States tax laws, and provide a means to efficiently process and return tax declarations and payments to those who are not eligible for to the numbers of the Social Security. Who needs an ITIN? IRS issues ITIN to foreign citizens and others who have federal reporting or federal reporting requirements and do not qualify for SSNs. A foreign non-resident individual who is not eligible for an SSN, who needs to file a tax return in the United States only to claim a refund of the tax according to the provisions of a tax treaty of # 39; USA, needs an ITIN. Some examples of individuals that need ITIN include: Presentation of a non-resident alien, a tax return from the United States and is not eligible for a foreigner residing in the United States (depending on the days present in United States) filing a tax return in the United States and are not eligible for an SSN or spouse dependent of an American citizen / dependent foreign resident or spouse of a holder of the # 39; a foreign non-resident visa
Once the incorporation process has been completed, the entity can set up a bank account. There are two types of bank accounts in the US: Verification account: This is an operating account that allows you to deposit funds and distribute these funds through checks and bank transfers. In most cases, check accounts do not carry interest. Some current accounts could be designated for a special purpose such as the payroll. Savings account: in this account, the entity deposits excess funds from the checking account. Normally, this account is of interest.
The information you need to collect from you as part of the federal money laundering effort includes:
Own name of the company and the name of the person opening the account. Physical address of the company: a post office can not be accepted. Identification number of the taxpayer of the business number or the Social Security of the person who opens the account. With regard to business information, a copy of your company's articles of incorporation, collaborative articles or comparable documents from your state government will establish the legitimacy of your business.
Finally, the documents obtained for the company must include the name of the individual by opening the account. If they do not do so, the business must provide a resolution to give the individual the opening of the account of the authority for the business transaction on behalf of the company.
Below is a list of samples of the documents you can ask when opening a bank account:
– Corporate documents (Certificate of training or incorporation). – Copy of EIN (SS-4) and the number. – Minutes of the meeting of the most recent board showing the identities of the members of the board (it must be at the head). – Examples of official identification, such as a passport or driver's license. The United States board must certify the passport (notarial). Bank reference letter for the company (if possible) and all the people (obligatory). – Copy of bank statement of persons showing the postal address (This must be from the bank that makes the reference). – Copy of the utility bill to the same address. – Letter with letter of company that requests the opening of the account and specifies the authorized signers. – A letter from the lawyer of the company confirming the incorporation status and the authorized persons that can act on behalf of the corporation (Indicate the property of the company, as well as list to any owner of the 25% or more).
A merchant account is simply a relationship between a retailer and a commercial bank that allows retailers to accept payments through their clients' credit card. This is the account in which a merchant account provider deposits payments to your business checking account based on online transactions. To qualify for a merchant account, retailers must meet the requirements of the bank.
Once the incorporation process has finished, your company is ready to start doing business in the United States. An important step in your business strategy is to minimize your taxes in the United States and the United States. To achieve this goal, the transfer price between its United States and international entities must be structured, setting revenue and expenditure budgets and maximizing payments and tax benefits. In order to comply with federal and state laws, the entity must submit quarterly reports, pay estimated taxes and declare annual tax returns to inform the income, expenses, benefits and taxes of the entity, as well as the revenues of the owners of the entity & # 39; benefits s.