What are the benefits of forming a Washington D.C. Corporation?
You will have limited liability, but not total protection from lawsuits. A corporation shield personal liability of owners. It is managed by shareholders, directors and officers whom run the business. Directors generally set policies. A corporation is also the most complex type of business structure and is subject to stricter government control and restrictions. Corporate earnings are subject to "double-taxation" when corporations are taxed and shareholders receive dividends although there are some additional tax benefits. To find out more about the tax benefits, please consult your local CPA or tax attorney.
Naming your DC corporation
A Washington DC corporation must contain the word Incorporated, Corporation or its abbreviation at the end of the name. The DC corporation name must be distinguishable from any other name on record or reserved by a corporation, LLC or limited partnership. A simple change such as using spaces, capitals, or special characters does not provide any distinction from another entity already on file. Using punctuation, prepositions and or articles in the company name may not provide distinction from that of another business entity. Certain words may require prior approval before its use.
Hot to Maintain Corporate Status?
The Secretary of State does require of all its business to maintain good standing. In order to do so, all corporations must have annual share holder meetings and a record of these meetings by recording minutes of the meetings. Also, a corporation must have on file, bylaws for the corporation. We provide sample by laws and minutes in our corporate kits. Also, there may be annual fees to register the corporation every year. Failure to meet these and other requirements may result in the termination or suspension of the corporation.
What is an EIN number and do I need one?
All businesses should get an Employer ID Number (EIN) whether they actually need one or not. This number is typically used when opening a business account. This will also separate you from your corporation, so there is no need to use your personal SSN when filing you tax return.
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