FAQ's (rough draft still have to edit for grammar and sentence structure)

also add in http://www.keyincorporators.com/library_llc.htm

Please view our extensive FAQ's on incorporating. These FAQ's were created by our attorneys to address the most common questions our clients have.

1) What is a corporation?

The corporation is a legal entity apart from the owners of the business. In essence, a corporation is separate and distinct from the owners, or shareholders, of the corporation. A corporation can own property, enter into contracts, have assets and conduct business under its own name.

2) What are the benefits of a corporation?

The primary benefit a corporation offers is that it protects the shareholders (owners) against personal liability. A corporation offers this protection because it is a legal separate entity apart from the shareholders. As such, a corporation is responsible for its own debts.

Moreover, a corporation offers several tax benefits to its shareholders. A corporation can limit the amount of taxes it owes by taking legitimate and legal deductions. Any expense, that is utilized in the course of doing business, is commonly referred to as deductible business expenses. For example, rent, employees’ salaries, utilities, motor vehicles, cost of good sold, are considered deductible business expenses.

Other advantages of owning a corporation include the fact that the sale of stock may be more attractive to investors than other forms of equity. Also, a corporation’s existence is perpetual thus allowing for it to exist beyond its founders. A corporation also has other financial and tax benefits including setting up pension, profit sharing, and stock option plans.

3) Do I have to hire a lawyer or an accountant to incorporate?

While we can not offer you legal or accounting advice, there is no legal requirement for someone to hire an attorney or an accountant to become incorporated. Save money on attorney and accountant fees and leave the work to us. Simply fill out on our online order the form to proceed.

4) Naming the corporation.

You are free to choose any name prefer. As part of service we perform the name check for you. The general rule is that the name must not be the same as another corporation. Moreover you must follow the company name you choose with a corporate ending of one of the following: "Inc" , "Co", "Incorporation", "Corporation", "Company", "Limited", or "LTD". Note: "Inc" is the most common and preferable designator.

5) What is an S corporation?

An S corporation is a corporation that has elected a special tax status with the IRS. This tax treatment allows the income of the corporation to be treated like the income of a partnership or sole proprietorship; the income is "passed-through" to the shareholders. The pass through taxation of an S corporation offers a great advantage over C corporations which may be subject to double taxation.

That is, a C Corporation, for any profits generated, is first taxed at the corporate level. Thereafter, when a shareholder receives a distribution of those profits, they are taxed at the personal level. Hence, the term "double taxation".

An S corporation, on the other hand, allows income, deductions, and losses to be passed through the S corporation to the individual tax return of each shareholder. This is the essence of "pass-through" taxation, i.e., the income is passed through to the shareholders. Therefore the shareholder's individual tax returns report the income or loss generated by an S corporation. In order to avoid double taxation, a large number of our clients, elect to be treated as an S Corporation.

After formation if you desire to be an S corporation, we prepare an application form for the IRS. Upon granting of this designation by the IRS (which we have a 100% success rate with our clients) you are then designated an S Corporation. On our order form, simply choose the S Corporation option on the drop down menu and we will take care of all the rest.

6) What are the advantages of an S Corporation?

For the average small business, the main advantage of an S corporation is the avoidance of double taxation. That is, the avoidance of payment of income tax on corporate net income, and then the payment of a further tax on the dividend income that is derived from the corporation. As we have stated in question #5 above, an S corporation allows income, deductions, and losses to be passed through the S corporation to the individual tax return of each shareholder. This is the essence of "pass-through" taxation, i.e., the income is passed through to the shareholders.

Note: In order to qualify for S corporation status, shareholders must number fewer than 75. These shareholders must be individuals. Furthermore, the shareholders can not be non-resident aliens

7) What is a corporate kit and what is it used for?

When filing for a corporation, the corporate kit is commonly required in most states to open a corporate bank account. The kit includes a professional tailored binder with your business name along with a matching slip case, customized handheld steel embosser, custom steel corporate seal, twenty custom stock certificates, stock transfer ledger, and other assorted necessities. The stock ledger serves the purpose for transaction records. Also, the kit includes the corporate minutes and by laws. The price for a corporate kit which you will find on the order form is only $78 which also includes free Fed Ex shipping!.

8)Registered Agent?

A registered agent is simply a person that is designated to receive mail on behalf of the corporation. The registered agent requirement can be fulfilled by anyone who resides in the state that you are incorporating in. This documentation typically amounts to one or two pieces of mail a year.

As we have built our business by being honest with our clients and by providing services they truly only need, we encourage our clients to act as their own registered agent. Afterall, why should you pay a company a recurring cost to simply forward you mail to you (particularly if you already have an address in the state that you are incorporating in). Along those lines, to reduce incorporation costs, many of our clients prefer to act as registered agent for the company being formed.

However, in the case wherein you do not have a physical address in the state of formation, we can assist you with registered agent service. For example we frequently act as the agent for clients who wish to incorporate in Nevada or Delaware but do not reside in those states.

9 )Free Registered Agent Explained

It's the old adage "There is nothing free in life."

If there is a service company is offering you "free registered agent service", ask what fees are they going to charge free period expires. Typically these companies will charge anywhere from $99 to $149 per year for registered agent service. By providing a short free time frame for free upfront, say 6 months, they then have you locked in. That is, these companies by offering free registered agent service upfront, can now bill you in 6 months for the next year's service, and every year thereafter. This can come as quite surprise for the uninitiated. Moreover, this is quite ironic as you could have served as your agent in the first place (as most of our clients do).

To be clear, unless you specifically elect this option, at Keyincorporators.com, as we allow you to serve as your own registered agent, there are no reoccurring agent fees.

8) How do I get my corporation filed?

In order to get your corporation filed, simply visit our online order form. Upon receipt of your order, Keyincorporators will complete and file all the necessary documentation to file and complete your company formation.