Posted 8/7/2015

Are you planning to start your own corporation? 

Corporations are legal entities existing in law as "artificial being" neither tangible nor visible. Existence generally depends on state law by filing articles of incorporation with the Secretary of State. Each state has its own corporate regulations, which are no always uniform.

Corporations can consist of one or more natural persons, but liability and authority to act are separated since the corporation substitutes itself for its shareholders. The overall management of the corporation is conducted by the board of directors, which is elected by stockholders.

About corporate taxation, profits are taxed in different levels. In general, corporation can retain profits or pass the profit to shareholders as dividends. There is no tax deduction for dividends distributed to shareholders. Generally, double taxation can be avoid by applying with the IRS to be treated as Small Corp 1120S.

Running your business as a corporation can be your best choice, but always consult your accountant or tax professional to guide you trough the process to ensure the best results.