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Featured State CALIFORNIA
California Annual Services Certificate of Existence Attorney Good Standing FTB Tax Status Letter California Incorporation California LLC California Nonprofit California Walk-in Services




CORPORATE GLOSSARY

Agent for Service of Process
Apostille
Articles of Incorporation
Articles of Organization
Assumed Name
Authorized Shares
Board of Directors
Business Entity
Bylaws
Certificate of Existence
Certificate of Status
Certified Copy
Common Stock
Corporate Bylaws
Corporate Name Reservation
DBA
Dividends
Federal Tax ID
Franchise Tax
General Partnership
Good Standing Certificate
Incorporator
Limited Liability Company
Limited Partnership
LLC
LP
Majority Shareholder
Meetings
Member
Organizer
Par Value
Preferred Stock
Proxy
Registered Agent
Registered Office
Reporting Requirements
S Corporation
Shareholder
Sole Proprietor
Statutory Agent
Stock Certificate



We can help you form a new Corporation quickly and easily.	Need to form a Limited Liability Corporation fast? Let us help.	New York Texas Florida Delaware Incorporate in 48 hours!


For most states, have your Certificate of Good Standing in your hands in 2-3 hours!	Need something else? Federal EIN Certified Copies S-Corporation Registered Agent	Glossary Secretaries of State State Fees, Times Corporate Tax Rates

BEFORE YOU INCORPORATE ONLINE YOU SHOULD KNOW EXACTLY

Why you want to form a Corporation
What kind of Corporation you want to form
Where you want to Incorporate

The information on this page may help you make these decisions. We would love to help you incorporate online. We've helped thousands of businesses through the corporate formation process. Once you make a decision we know what needs to be done and how to do it as quickly and effieciently as possible. However, if you don't know the answer to any of these questions, you should seek the advice of a competent lawyer, accountant or both before you incorporate online.

Why Incorporate

The main reason that businesses incorporate is to isolate the owner's assets from the business's debts and liabilities.

A Corporation is an artifical legal entity which can do almost anything a person can do. For example, a Corporation may enter into contracts, open a business, or own real property. In a properly structured and managed Corporation, and absent any fraud, owners should have limited liability for business debts and obligations. Liability is usually limited to the amount that the owners have invested in the business.

Because a Corporation is considered as a legal entity separate from its owners, an owner (stockholder) is a holder of shares of stock in the Corporation and is not the employer of those working for the Corporation or the owner of any Corporate property.

Corporations can implement various tax-free benefits such as life and health insurace, retirement plans and stock ownership plans. Corporations usually have a perpetual life as well, distinct from that of the shareholders who own the Corporation.

The owners of a Corporation can often save thousands of dollars in income taxes by keeping a small amount of profits in the Corporation and paying out the rest to themselves as employee salaries and bonuses. Also, Corporations can deduct normal business expenses before declaring profit. Many small business benefit from this feature.

What are the Types of Corporations

C Corporation

Most of the large companies that you are familiar with (GE, FedEx, etc.) are C Corporations. (The "C" is for subsection C of the IRS code.) If you plan to issue a lot of corporate stock to attract investors then a C Corporation may be the best solution. C Corporations may grow and expand more than the other types of Corporations. Corporate stock is issued to shareholders. Shareholders own the Corporation. Owners who work in the business are treated and taxed as employees of the Corporation.

C Corporations take on a distinctly separate business and tax identity from that of the owners and are subject to corporate income taxes that are completely separate from their owners. The owners are removed from personal liability for debt incurred by the Corporation. Should the business go bankrupt or be faced with a lawsuit, absent any fraud, the owner's personal assets (houses, cars, bank accounts, etc.) are protected.

C Corporations pay tax on their corporate profits. After-tax profits may be retained in a C Corporation or they may be distributed to its shareholders in the form of dividends. Shareholders then pay tax on their dividends at the applicable personal tax rate. This is sometimes referred to as "double taxation".

S Corporations and LLCs may choose "pass-through" taxation as explained below. In pass-through taxation there is no corporate income tax. All taxable profits are passed through to and paid by the owners thus avoiding the double taxation of C Corporations. Also, tax reporting requirements are usually more complex for C Corporations than for the other types of Corporations but corporate tax rates are usually lower than personal income tax rates.

There is no limit to the number of C Corporation shareholders and shareholders need not be US citizens or permanent residents. The other types of Corporations have constraints on ownership as explained below. C Corporations may have more than one class of stock and shareholders may be other Corporations. S Corporations may have only common stock. LLCs do not issue corporate stock.

S Corporation

S Corporations are not treated as separate taxable entities like C Corporations. (The "S" is for Chapter S of the IRS code.) No corporate income tax is paid to the IRS for S Corporations. For tax purposes net income is "passed through" the S Corporation to the personal income tax of the shareholders and paid at the appropriate personal income tax rate. With an S-Corporation double taxation (paying both corporate and personal income taxes) can be avoided while retaining all the legal protections of a C Corporation.

As in a C Corporation shareholders of corporate stock are the owners of the S Corporation. Federal law alows a nontaxable Employee Stock Ownership Plan to hold stock in an S Corporation. This gives shareholders a way to defer some of their taxes. No tax is paid on these stocks until they are withdrawn from the Plan.

All Corporations start out as C Corporations. In order to be treated as an S Corporation a form must be filed with the Federal government within 90 days of incorporation of the C Corporation.

An S-Corporation has some limits on ownership. It may be a better choice if you know that your Corporation will always be small and be owned by a small group of people.

S Corporation constraints include:

No more than 100 shareholders
All shareholders must be either US citizens or resident aliens, certain trusts, estates or organizations
Shareholders may not be partnerships, Corporations or non-resident aliens
Only common (not preferred) stock may be issued

S Corporations are required to hold director and shareholder meetings just like C Corporations.

Limited Liability Company (LLC)

A Limited Liability Company is not a partnership or a corporation but includes features of both. LLCs are structured like a partnership or a sole proprietorship but with limited liability protection similar to a corporation.

Like a C Corporation, an LLC is considered as a separate tax and business entity from its owners. Because an LLC is considered a separate entity from its owners, the owners cannot be held personally liable for debts and obligations of the LLC, absent any fraud. This is one of the principal advantages of an LLC. LLC's provide all the liability protection of a C Corporation but with less formalities and corporate obligations.

For example, bankruptcy can have serious personal consequences for a sole proprietorship or general partnership. However, if an LLC declares bankruptcy the owner's assets are considered separate from the assets of the LLC and are thus protected from bankruptcy. Each state has different rules governing LLCs. There are usually special rules for foreign LLCs. LLCs do not issue corporate stock. LLC owners are called "members" not partners or shareholders.

The formation documents for LLCs are called Articles of Organization. Every LLC must file Articles of Organization with a state agency - usually the Secretary of State. PCF can prepare Articles of Organization based on your specific business requirements.

The IRS does not recognize an LLC as a classification for federal tax purposes. LLC members can elect for the IRS to tax the LLC as a sole proprietorship, partnership, C Corporation, or S Corporation. This decision may be made after the LLC is created. If a single member LLC does not declare a tax classification within the alloted time it is taxed the same as a sole proprietorship. A multiple member LLC that does not declare a tax classification is taxed as a general partnership. There is more information at the IRS web site.

Some features that make LLCs different from S and C Corporations

LLCs are not required to hold director and shareholder meetings
A board of directors is not required
The owners and managers may make all management and operation decisions
Generally have more flexibility in the way that profits are distributed
Require no corporate minutes or resolutions
Owners do not have to be residents or citizens of the USA

A Corporation legally exists until it is formally dissolved. An LLC may be structured to automatically dissolve if a member dies, withdraws from the company or declares bankruptcy.

LLCs may be governed by an Operating Agreement. Operating Agreements may include requirements for profit sharing, ownership responsibilities and almost anything else that involves the management and operation of the LLC. Although Operating Agreements are not legally required, it is highly advisable to have one. If your LLC should encounter difficulties down the line a well drafted Operating Agreement can potentially save a lot of time and money. PCF can prepare an initial Operating Agreement based on your specific business requirements.

Where should I Incorporate

You are free to choose any state in which to incorporate. There is no requirement that you must form your business in the state where your business is located physically or where most of the Corporation's business will be conducted. If you're a small business and plan to operate in only one state then it makes a lot of economic sense to incorporate in that state. Usually it costs less to incorporate or form an LLC locally. Incorporating locally also can be the least complicated way to form a new business if you plan to operate exclusively in your home state.

If you incorporate in one state and plan to do business in other states, you will have to qualify as a Foreign Corporation or LLC (and pay a fee) to do business in any state in which you are not incorporated. There will be separate reporting requirements as well as recurring fees in each state in which you do business. Also, situations may arise where you would have to pay lawyers and/or accountants from each state instead of just the state in which you are incorpoprated. It is for this reason that most Corporations, especially small Corporations, decide to incorporate in the state in which they conduct most of their business.

If you plan on growing into a multi-state business then it might make sense to incorporate in Delaware or Nevada. Delaware has a very pro-business legal system. Nevada has no state Corporate income tax, personal income tax or franchise tax. Delaware and Nevada also have lower incorporation fees relative to other states. Most new Corporations or LLCs are formed in Delaware, Nevada or the home state of the business.

Do I need a lawyer to form a Corporation or LLC

While you are not legally required to hire an attorney to incorporate or form an LLC, it is a very good idea to consult with a lawyer who is familiar with the corporate laws in the state in which you plan to form your business.

After you've figured out where you want to incorporate and what kind of corporation that you want to form that's where PCF comes in. You can pay a lawyer a few hundred dollars an hour to file your formation documents - and help you keep up with recurring Corporate requirements - or you can choose PCF and save a lot of money that you can put right into your new business.

How can PCF help me form a Corporation or LLC

We've helped thousands of new businesses through the incorporation process in all 50 states. We know who to contact and what needs to be done so that your new Corporation or LLC will be up and running as quickly as possible. PCF uses clear, concise and intuitive order entry forms.

When we receive your order we will fill out all the necessary forms and submit them to the Secretary of State on the same day. We guarantee 100% accuracy when we process your incorporation documents. In addition, if you choose PCF to file your Corporation or LLC documents, we will notify you each year well in advance of any required state reporting requirements.

With PCF what you see is what you get. A lot of online incorporation sites use bait and switch techniques to lure customers in so they order other corporate services. Some sites even offer no cost incorporation but when you actually fill out the forms you find that a lot of costs are required to meet your specific business formation requirements. When you use PCF all costs are plainly visible on the screen. There are absolutely no hidden costs or ulterior motives.

PCF takes the privacy of your personal information very seriously. We DO NOT use your information for any other purposes than your Corporation or LLC order. We will never provide your personal or credit card information to any person, group or third parties. We delete your credit card information from our system when your order is completed.

Our web site is monitored daily by the acknowledged web security firms AlertSite and GeoTrust. No hackers have ever been able to access our web site since we've been in operation. Any vulnerabilities that are identified are fixed on the same day that they are found. In addition, PCF holds a website identity assurance warranty of $10,000 with Comodo. This means that you are insured for up to $10,000 when relying on the information provided by IdAuthority on our site.

PCF is listed with the Golden Gate Better Business Bureau which handles customer complaints, dispute resolution, and establishes ethical rules. We are proud to report that we have not received any complaints since we started business in 2003.

For more specific information pick a state from either the Corporation or LLC lists below.

Corporation
Alabama	Kentucky	North Dakota
Alaska	Louisiana	Ohio
Arizona	Maine	Oklahoma
Arkansas	Maryland	Oregon
California	Massachusetts	Pennsylvania
Colorado	Michigan	Rhode Island
Connecticut	Minnesota	South Carolina
Delaware	Mississippi	South Dakota
District of Columbia	Missouri	Tennessee
Florida	Montana	Texas
Georgia	Nebraska	Utah
Hawaii	Nevada	Vermont
Idaho	New Hampshire	Virginia
Illinois	New Jersey	Washington
Indiana	New Mexico	West Virginia
Iowa	New York	Wisconsin
Kansas	North Carolina	Wyoming
LLC
Alabama	Kentucky	North Dakota
Alaska	Louisiana	Ohio
Arizona	Maine	Oklahoma
Arkansas	Maryland	Oregon
California	Massachusetts	Pennsylvania
Colorado	Michigan	Rhode Island
Connecticut	Minnesota	South Carolina
Delaware	Mississippi	South Dakota
District of Columbia	Missouri	Tennessee
Florida	Montana	Texas
Georgia	Nebraska	Utah
Hawaii	Nevada	Vermont
Idaho	New Hampshire	Virginia
Illinois	New Jersey	Washington
Indiana	New Mexico	West Virginia
Iowa	New York	Wisconsin
Kansas	North Carolina	Wyoming

PCF, Inc. is not a lawyer or an accountant and provides only entrepreneurial services under your supervision.
*48 hour incorporation and 24 hour certificates of good standing in Featured States only. Expedited processing may require additional state fees.
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