What is a Corporation?

A Corporation is a legal entity governed by state law, that exists separate and apart from those individuals who created it.  It is an invaluable asset protection tool because it shields all of its participants from liability for the debts of the business. Properly structured, a corporation can provide the maximum protection against liability from third parties while offering the most attractive tax benefits to the owners of the business.

Advantages

  • Limited Liability – investors risk only the amount of their investment and are not individually responsible for corporate obligations.  Similarly, directors, officers and employees are not personally liable for corporate obligations unless in violation of law.
  • Separate legal existence – a corporation is a legal entity separate from the people who manage and work for it, or participate in its activities-a legal “person,” capable of entering into contracts, incurring debts, receiving and maintaining funds, and, generally, doing anything a real person can do.
  • Centralized management – business is managed by a board of directors and by elected officers. The owners of the business are the shareholders, who contribute cash, property, or services in exchange for their ownership rights, evidenced by share certificates.
  • Continuity of life – a corporation has the power to exist forever and, therefore, is unaffected by the death of an owner or manager or by the transfer of ownership interests.
  • Capital generation – may sell common or preferred stock, issue bonds, and borrow money, mortgage assets, or contract for many types of financing.
  • More tax deductions and tax planning benefits available than to the unincorporated business.  Has the ability to use a different fiscal year end other than December 31, which can create awesome tax advantages.
  • Fewer IRS Audits.
  • A business can offer its owners and employees a variety of fringe benefits, which may be wholly or partially tax-free or tax-deferred.

Disadvantages

  • Double taxation. Income received by the corporation is taxed at the corporate level according to the corporate rates then in effect. The profit remaining after taxes is available for distribution to shareholders as dividends; and if dividends are distributed, the distribution is taxed again as personal income to the shareholder.

    (In the real world, small closely held corporations can easily avoid income taxes. All or almost all of the earnings are typically paid out to its employees as wages and fringe benefits. After everyone and everything is paid, there is usually no income for the corporation to owe tax upon.)

  • Securities regulation – sales of bonds, notes, stock, investment contracts, etc. to raise money requires securities registration if offered to the public and advertising or solicitation is used to attract investors.
  • Required to hold and document board of director and shareholder meetings.

Tax Implications

  • Corporations file a separate tax return (IRS Form 1120) and report earnings and taxable profit.
  • Will be liable for employment taxes.
  • To take advantage of tax-free fringe benefits the following requirements must be met:

    -The tax code must specifically allow it
    -It needs to be in writing (plan documents, director approval thru minutes/resolutions)
    -It must have an indefinite life (can’t expire next year or based on age of employee)

Do you require assistance to incorporate or have questions?

Speak to our Business Support Specialists today:

1-800-254-5779

Email Us

Ready to Get Started?

Are you ready to form your Corporation?

To begin, give us a call at 1-800-254-5779

Download PDF Application

Please save the form to your computer, you can send the form to us via E-Mail when completed.

Why Use Sage International, Inc.?

Simplicity

Our goal is to remove the confusion and complexity so that you can make an informed choice right from the start.

Service

Our clients dig the fact that we are available by phone, email and in person. Our Staff is available to answer any questions promptly.

Empowerment!

Utilizing our wealth of information from our staff. You can rest assured that we provide education for your success!

What People Say About Us

Thank you for your informative, engaging, and very valuable presentation at the ANN Reno Conference for Nonprofits. "The Keys to Successful Nonprofit organization will be critical to the success of our fledgling nonprofit. Your presentation style is extremely effective and furthered networking among those attending the conference, Thank You! I appreciate your generosity in sharing your time and expertise with us at the conference.
Kay Gore
For six years we have listened, learned and implemented all of your strategies and advice. I can’t even begin to tell you how fantastic it is to actually see the results we have produced and are getting closer and closer to our financial freedom day.
Forrest & Anna Cummings, Silver Springs NV
I can honestly say that when you speak you have such an amazing ability to make everyone in the room feel comfortable. You are open, honest, funny and brilliant! It is a delight to learn from you and I always walk away with a new ah ha!
Doug Hixson, Reno NV
My wife and I took the class on the Language of Money last Saturday and heard you speak. To be honest with you, both my wife and I wished that you had done the entire class! We found the info you had presented both interesting and hopeful that there is something we can do to protect our business and our money from getting consumed by the IRS.
Steve & Christine Sanders, Sacramento CA
I wish that I could move the clock back 10 years so that I could work as an intern under Cheri S. Hill.
Zenzo Tazawa - Santa Rosa CA
I read Incorporate and Grow Rich in 2005 and took advantage of Sage International’s services to create www.transguardian.com, an online logistic and insurance management corporation. We went from bootstraps capitol in a spare room to a downtown office with revenue of seven figures in three years. We have always had complex needs, and Sage has always had intelligent, innovative and highly practical answers. Now with double digit growth in spite of an adverse economy, our questions are even more complex and sophisticated, and Sage continues to offer solutions that are flexible, workable and creative as we are. We’ve sent perhaps a dozen clients to Sage over the last few years, and, without exception, everyone of them has thanked us profusely for the recommendation.
Jim Moseley
Cheri, I cannot tell you how much I enjoyed listening to your and Pragito's insights and advice. It really spoke to my heart, and gave me some awesome tools to use to overcome my fears and negative thoughts about my ability to make this new business work, and fulfill my dream of having a more flexible schedule to spend more time with my family. I have signed up for her newsletter.
Christine Wyman
Northern Nevada Metro Woman
Cheri, I can’t express enough how much I appreciate your time, energy, and knowledge. Your support of ProNet Reno is nothing less than phenomenal.
Pieter Droog
ProNet Reno
Dear Cheri, I wanted to thank you for speaking at the Sparks Power Players. I have to say that most of the meetings I have gone to for other organizations are usually very boring and do not pertain to me, but today was great! I got so much out of the material that you presented to us. I want to thank you for your passion and heart for helping companies not only survive, but thrive. I am very excited to apply what I learned today to our business and see the results. Again thank you for your time.
Duane Lee
Moving Consultant
I loved your article in the Northern Nevada Business Weekly about "Sparking Creativity". You make some really great points about the importance of investing in your creative core. For years I have followed the Artists Way and all the books by Julia Cameron, you must be familiar with her work. As an Interior Designer, I love that I am rewarded for my creative ideas and designs. Your article made me smile, gave me some great ideas about how to live a creative life and I wanted to thank you.
Marilee Wintz
I received my minute book and had Danielle give me a walk through. I gave her 5 stars afterwards and One Bravo! Cheri, I give out Few Roses, however in your case you get a Dozen ! I am really looking forward to working along with you in the very near future . Thank you from the bottom of my Dinosaur Heart.
Robert Bingham