Corporations
A corporation is the most complex form of business organization
to create, primarily because of the paperwork required to establish
a corporation. Business activities are restricted to those listed
in the corporate charter. However, most corporations define
business activities in very broad terms in the charter.
There are two types of corporations in Pennsylvania; C corporations
and S corporations. The income and losses of each are
determined using different rules. While C corporations follow
federal income tax rules for determining income with some
adjustments, S corporations must use PA personal income tax
rules for determining income, as well as book income for determining
capital stock/foreign franchise tax.
Advantages of a corporation structure include the limitation of
liability to the amounts owners have contributed to shares of
stock and the fact that a corporation’s continuity is unaffected by
the death of or transfer of shares by any owner. Disadvantages
include extensive record keeping, close regulation and double
taxation, since profits are taxed at the corporate level, and dividends
paid to owners are taxed at the individual level.
In forming a corporation, prospective shareholders transfer
money and/or property for the corporation’s capital stock.
To form a corporation in Pennsylvania, articles of incorporation
and a docketing statement must be filed with the Corporation
Bureau of the PA Department of State. Foreign (out-of-state)
corporations must submit applications for Certificates of
Authority and docketing statements, to conduct business in
Corporations
A corporation is the most complex form of business organization
to create, primarily because of the paperwork required to establish
a corporation. Business activities are restricted to those listed
in the corporate charter. However, most corporations define
business activities in very broad terms in the charter.
There are two types of corporations in Pennsylvania; C corporations
and S corporations. The income and losses of each are
determined using different rules. While C corporations follow
federal income tax rules for determining income with some
adjustments, S corporations must use PA personal income tax
rules for determining income, as well as book income for determining
capital stock/foreign franchise tax.
Advantages of a corporation structure include the limitation of
liability to the amounts owners have contributed to shares of
stock and the fact that a corporation’s continuity is unaffected by
the death of or transfer of shares by any owner. Disadvantages
include extensive record keeping, close regulation and double
taxation, since profits are taxed at the corporate level, and dividends
paid to owners are taxed at the individual level.
In forming a corporation, prospective shareholders transfer
money and/or property for the corporation’s capital stock.
To form a corporation in Pennsylvania, articles of incorporation
and a docketing statement must be filed with the Corporation
Bureau of the PA Department of State. Foreign (out-of-state)
corporations must submit applications for Certificates of
Authority and docketing statements, to conduct business in
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Corporations
A corporation is the most complex form of business organization
to create, primarily because of the paperwork required to establish
a corporation. Business activities are restricted to those listed
in the corporate charter. However, most corporations define
business activities in very broad terms in the charter.
There are two types of corporations in Pennsylvania; C corporations
and S corporations. The income and losses of each are
determined using different rules. While C corporations follow
federal income tax rules for determining income with some
adjustments, S corporations must use PA personal income tax
rules for determining income, as well as book income for determining
capital stock/foreign franchise tax.
Advantages of a corporation structure include the limitation of
liability to the amounts owners have contributed to shares of
stock and the fact that a corporation’s continuity is unaffected by
the death of or transfer of shares by any owner. Disadvantages
include extensive record keeping, close regulation and double
taxation, since profits are taxed at the corporate level, and dividends
paid to owners are taxed at the individual level.
In forming a corporation, prospective shareholders transfer
money and/or property for the corporation’s capital stock.
To form a corporation in Pennsylvania, articles of incorporation
and a docketing statement must be filed with the Corporation
Bureau of the PA Department of State. Foreign (out-of-state)
corporations must submit applications for Certificates of
Authority and docketing statements, to conduct business in
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