Business Formation

Most jurisdictions require that the corporation designate a registered agent for Service of Process. Generally, anyone who has a street address within the state of incorporation may act as a registered agent for the corporation. PO Boxes are not allowed to be used for a registered Agent. Most tax notices are sent to the Registered agent.

Most jurisdictions allow the same person to act in different capacities. Generally, There are up to 6 officers. President, Vice President, Treasurer, Secretary or clerk, Assistant Secretary, Assistant Treasurer.
Although most jurisdictions allow one person to serve in all capacities, the person's responsibility and authority changes through the different officer ships the person assumes.
The President is typically responsible for entering into contracts on behalf of the corporation, the Treasurer is responsible for maintaining and accounting for corporate funds, and the Secretary is responsible for observing corporate formalities and maintaining corporate records. In addition to these required officer positions, a corporation may also have vice presidents and assistant secretaries or assistant treasurers.
Generally, the authority and responsibilities of each officer is described in the corporate bylaws and may be further defined by an employment contract or job description.
The President has the overall executive responsibility for the management of the corporation and is directly responsible for carrying out the orders of the board of directors. He or she is usually elected by the board of directors.
The Treasurer is the chief financial officer of the corporation and is responsible for controlling and recording its finances and maintaining corporate bank accounts.
Actual fiscal policy of the corporation may rest with the Board of Directors and be largely controlled by the president on a day to day basis. The Secretary is typically responsible for maintaining the corporate records.

Both entities provide the benefits of pass-through taxation to avoid double taxation of profits as well as limited liability for the owners. S Corporations pass-through income to the shareholders who pay no Self Employment tax on that income, While LLC income is subject to self employment tax. S corporations have restrictions which are not applied to limited liability companies. Limited liabilty companies cannot issue stock, but rather, they offer memberships. S corporations, issue stock and are owned by the shareholders. S corporations are managed by the directors and officers, while limited liability companies are managed directly by the members unless they hire managers.

Shares of stock represent ownership of a corporation. When no shares are issued, no individual(s) owns the corporation. Therefore, shares must be issued to those individuals who will own the corporation. Most states have created many exceptions and exemptions from registering a stock issuance with the State or with the Securities and Exchange Commission for most small businesses, it is recommended to contact the appropriate entity to determine whether you must file a notice of stock issuance on a state or Federal Level.

A business corporation must sell shares of stock in order to capitalize the corporation. Capitalize provides the corporation with its own capital, separate from the money of its owners. This separation provides part of the support for shielding the shareholders from personal liability for the debts and obligations of the corporation. Shares of stock sold by the corporation represent proportionate ownership interests held by shareholders in the corporation. Par Value is a dollar value assigned to shares of stock which is the minimum amount for which each share may be sold. There is no minimum or maximum value that must be assigned. Shares may also have No Par Value, which means that the Board of Directors will assign a value to the stock below which the shares cannot be issued. There is no minimum number of shares that must be authorized in the articles of incorporation. One or more shares may be authorized. The corporation may not sell more shares than it is authorized to issue and it must receive consideration in exchange for its shares.

Incorporating will not keep another business from using your name. Filing articles of incorporation only prevents the secretary of state from filing a document to create another corporation, limited liability company or limited partnership that has the same, a deceptively similar, or similar name as the entity already in existence. Generally, every business must protect its own business name and the good will that it has acquired from the sale of its goods or services in a specific geographic area.

Most jurisdictions do not require publication in a newspaper unless an existing unincorporated business intends to incorporate without a change in its name. That business must then publish its intent to incorporate in the local newspaper for four consecutive weeks (in most jurisdictions). While a few jurisdictions (Georgia, Arizona, Illinois, and Pennsylvania), require publication of the corporate name to be published in a newspaper local to the county of the registered agent

A close corporation is also known as a closely held corporation. It is a corporation in which the stock of the corporation cannot be traded on a public exchange such as the NYSE, NASDAQ, etc. and the number of shareholders must be specified, and typically cannot exceed 30 and certain limitations may be placed on the transfer of stock. A close corporation can be advantageous for small businesses.

Generally states require the filing of a corporations Articles of Incorporation, the initial franchise taxes, and corporate filing fees.