start your c-corporation
C corporation is the most common type of company in the United States – and rightly so. Start your C-corporation (C-corp) and get the unlimited potential for growth through the sale of shares, which means you can attract some very wealthy investors. In addition, there is no limit to the number of shareholders in the C corp entity. Almost all the big companies in the US are C-corp.
C-corp is formed and regulated at the state level. The corporation is formed after filing the articles of incorporation obtained at the state’s secretary of state office. Policies and cost differ from state to state.
Advantages of C Corporation
There are many advantages of C-corp. Here are some of those that stand out.
Limited Liability: This applies to directors, shareholders, and employees.
Durability: Even if the owner leaves the company or dies, business continues.
Credibility: Suppliers and creditors respect the company.
Unlimited potential: The sky is the limit through the sale of shares.
Limitless shareholders: There are no restrictions on the number of shareholders. However, once the company has $10 million of assets and 500 shareholders, it must register with the SEC in accordance with the 1934 Law on Securities Exchange.
Tax benefits: Enjoy tax-deductible expenses, So why wait? Start your C-Corporation today.
What’s the downside about a C-corporation?
Having unlimited growth comes with its own challenges. Let’s take a look at some of them.
Double taxation. It is inevitable that the income taxed at the company level and are taxed again as dividends to shareholders.
Expensive to incorporate: There are many expenses that come with submitting articles of incorporation. And companies pay fees to the state in which they operate.
Regulations and formalities: C-corp experiences more government control than other corporations because of complex tax regulations and the protection given by the owners to be responsible for the corporation’s debts, lawsuits, and other obligations.
No deduction of business losses: Unlike in S-corp, shareholders can not deduct losses on their individual tax returns.
C Corporation vs S Corporation
Both corporations C and S give the limited liability protection. They demand that the articles of incorporation be filed and submitted. And both have shareholders, directors, and officers. There are many similarities, but they differ in the complex areas of taxation and ownership.
C-corp is subjected to double taxation, while S-corp has pass-through tax structures, this prevents owners from being taxed at both the corporate level and shareholders individual income taxes.
As for business ownership, C-corp has no restrictions on the ownership, it can have as many owners as it likes. But S-corp does not enjoy that luxury because they are limited to maximum 100 shareholders.
Preparing to incorporate in Texas
To start your C-corporation in Texas, you must file a certificate of formation with the Secretary of State and pay the filing fee. The existence of the corporation begins as soon as the Texas secretary of state receives your filing unless a different date is specified on your certificate. Certificate of formation must include these provisions:
- Company name.
- The names and addresses of the organizers.
- The names and addresses of the administrators.
- The registered agent and registered office.
- Corporate purpose.
- Shares structure.
- The duration of the company, if not permanent.
As for the shares structure, your certificate of formation must contain the following information:
You must specify the total number of shares that the company initially was authorized to issue and indicate the nominal value of shares or that shares have no nominal value. Shares with value cannot be sold for less than the stated value. The shares with no value can be sold for any amount decided by the directors. This process can get complicated that’s why we strongly suggest to start your C-Corporation by contacting us first for one on one consultation.
GET YOUR C-CORPARATION TODAY