Vikmar Tax & Accounting Specialties, fulfilling Bookkeeping, Payroll, and Tax Preparation needs of small businesses in the East Bay and Yosemite Foothills.
Incorporate Your Business
Why Incorporate?
All legal and tax professionals agree, if your business is not incorporated you may be throwing away thousands of dollars in tax savings and deductions.
In addition, all of your personal assets such as your home, cars, boats, savings and investments are at risk and could be used to satisfy any law suits, debt or liability incurred by the business. Forming a Corporation can provide the protection and tax savings needed to give you peace of mind and make your business even more successful and profitable.
Some Benefits Include:
- Liability Protection: Properly forming and maintaining a corporation will provide personal liability protection to the owners or shareholders of the corporation for any debt or liability incurred by the business. Personal liability of the shareholders is normally limited to the amount of money invested in the corporation.
- Tax Advantages: Another important benefit is that a corporation can be structured many ways to provide substantial tax savings. You can minimize self-employment taxes and increase the number of allowable deductions lowering the taxes you pay on the income of the business. Many corporations structure retirement and tax deferred savings plans for their owners and employees which can provide even greater tax savings.
- Raising Capital: Sale of stock for the purposes of raising capital is often more attractive to investors than other forms of equity sales. A corporation can also issue Corporate Bonds to raise capital for expenditures without compromising the ownership of the business.
Incorporating Questions
What is a corporation?
A corporation is a legal entity that exists separately from its owners. Creation of a corporation occurs when properly completed articles of incorporation are filed with the correct state authority, and all fees are paid.
What is the difference between an "S" corporation and a "C" corporation?
All corporations start as "C" corporations and are required to pay income tax on taxable income generated by the corporation. A C corporation becomes a S corporation by completing and filing federal form 2553 with the IRS. An S corporation's net income or loss is "passed-through" to the shareholders and are included in their personal tax returns. Because income is NOT taxed at the corporate level, there is no double taxation as with C corporations. Subchapter S corporations, as they are also called, are restricted to having fewer than 75 shareholders, who must be individuals (S Corps cannot be owned by other corps) who are not nonresident aliens.
Do I need an attorney to incorporate?
No! Having an attorney is not a legal requirement to incorporate, except in South Carolina (a signature by a SC attorney is required on articles of incorporation). In all other states, you can prepare and file the articles of incorporation yourself; however, you should be thoroughly versed in the laws of your state.
In spite of their seemingly high hourly fees, a good corporate attorney can be a valuable resource to your small business. If you are unsure of what steps your business should take and you don't have the time to research the mater yourself, I can answer your questions. Once you have decided, we can form your corporation and save you money.
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Viktorea Martinez
East Bay Office:
P.O Box 1149
El Cerrito, CA 94530
510-222-1916 office
510-222-1408 fax
Sonora Office:
P.O Box 2200
Columbia, CA 95310
209-532-0002 office
209-532-1629 fax
E-mail:
viktorea@vikmaracct.com
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