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In forming a Sub S corporation if the shareholder contributes a piece of equipment to the corporation what is its basis in the corporation?
Wiki User
∙ 16y ago
The equipment would become a fixed asset of the corporation.
Wiki User
∙ 16y ago
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Why is the corporation the favorite form of business organization in the US?
From a tax standpoint, there are some benefits for a small business to form a corporation, of course there are different forms of corporations and the benefits differ. The primary reason and benefit in forming a corporation is the limited liability involved. A corporation is like an individual taxpayer or person in that if the corporation is sued from some reason and don't have enough insurance to cover the loss, the suit cannot generally take the assets of the business owners except for the value of their ownership in the business. A business owners home and family are protected from attachment due to this issue. They may loose their business but not everything in their life.
How to Form a Corporation ?
Many business owners choose to form corporation for a variety of reasons. If you are considering formation a corporation, you may want to consider the process to decide if you are prepared and able to complete the process without an attorney.First, you will need to have a name for the corporation. Check with your state’s office for the rules on naming a corporation but generally you will need to choose a name that is not already being used. The name you select cannot be the same as the name of any other corporation on file. The name also must end with the words “Corporation,” “Incorporated,” or “Limited,” or any of the appropriate abbreviations. There are also terms that cannot be used such as Bank, United States or Federal.In order to form a corporation you will also need to appoint directors who will make policy and financial decisions for the corporation. The duties include authorizing issuance of stock and setting salaries. Typically, the owners of the business appoint themselves as directors but they are not required to be.Articles of Incorporation will need to be filed for the corporation with the secretary of state in your state’s capital city. Articles of Incorporation may also be referred to as a certificate of incorporation or a charter. Usually, this is a standard form to be completed that includes the owner’s and co-owner’s (if any) names, signatures and office address. The Articles of Incorporation usually include a fee for filing of $100 to $800 depending upon the state office that you are filing with.Bylaws are then prepared for the corporation which are the rules that govern the operations of the corporation. Often, the corporate bylaws can be prepared by following any number of self help resources or an attorney can draft them for the corporation. A Shareholder’s Agreement is also prepared which designates the plan in the event an owner retires or leaves the corporation.Corporations will need to hold a First Meeting of the Board of Directors to handle further decisions in setting the corporation’s fiscal year, appointing officers and adopting an official stock certificate and corporate seal.In the final steps of forming a corporation, you will need to issue shares of stock to divide the ownership interests in accordance with securities laws and obtain any necessary licenses and permits for starting new businesses.If you are not certain about handling any of the steps in forming a corporation, you may wish to consult with an attorney that handles business matters.
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Can you start a business as an incorporation?
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When did Charles K. Gifford found FleetBoston Financial Corporation?
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What are the advantages and disadvantages of forming a corporation?
One advantage to forming a corporation is the fact that you aren't exposed to personal liability. One disadvantage is the fact that it can be expensive to start one compared to starting a proprietary business.
How would one go about forming a corporation?
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What is one advantage of forming a limited liability company instead of a corporation?
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Is there anywhere online that I can purchase a roll forming machine and how much will it cost?
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Can a corporation be a partner in another corporation?
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What is preincorporation contracts?
Business persons sometimes enter into contracts on behalf of a business organization that is not yet formed. For example, a person forming a corporation may enter into a contracts during the process of incorporation but before the corporation becomes a legeal entity. Once the corporation is formed, it can then enforce the contract terms by means of novation.
Where could one find information about how to form a corporation in the US?
The Internal Revenue Service (IRS) and Small Business Administration (SBA) both have information about forming a corporation on their websites and in their printed materials. Most states also have state-specific information available on their websites.
