Corporations

There are several types of corporations to choose from.  The choice depends on your goals, structure, and your industry requirements.

• Corporation
  • A corporation is a separate entity from the shareholders (owners).
  • It is formed by filing the Articles of Incorporation with the Secretary of State.
  • Shareholders are not personally liable for the debts of the corporation.  Their liability is limited to the amount invested in the corporation or rather the amount of their shares.
  • Shareholders appoint the Board of Directors
• Closely Held Corporation
  • A Corporation can also be known as a “Closely Held Corporation”
  • There are a limited number of shareholders (in California it is limited to only 35 shareholders) in a Closely Held Corporation.
• S-Corporation or Subchapter S Corporation
  • An S-Corporation is a corporation that is designated a “Small Business Corporation” by the Internal Revenue Service.
  • “Pass through” taxation or the shareholders (as opposed to the corporation) are taxed on the profits and losses of the business.
• Professional Corporation
  • A professional corporation (P.C.) is owned by shareholders who are members of a profession (i.e. doctors, lawyers, or accountants).
  • A PC is only allowed to have one type of share.
• Non-Profit Corporation (501(c)(3))
  • A non-profit corporation is a regular corporation that is designated “non-profit” by the Internal Revenue Service.
  • Tax-exempt