Why form a Minnesota Corporation?
The advantages of forming a Minnesota Corporation are many. However the biggest advantage is the reason most people form a Corporation. The main benefit for setting up a Corporation is the limited liability that is afforded to you. The Corporation is in itself a legally separated entity away from any individual, owner, director or share holder. Therefore in the event of a lawsuit, none of these individuals' personal assets would be affected. There are other benefits such as tax related benefits. You may in fact pay fewer taxes depending on certain circumstances. It would be wise to consult a professional on the tax benefits of forming a Corporation.
Aspects of a Corporation:
- The life is independent of any owner or individual;
- Provide liability protection of share holders and owners;
- Ownership is transferable as long it meets certain laws;
- Tax liabilities might be less under certain circumstance;
Considerations in naming your corporation
The Minnesota Corporation name shall be in the English language or in any other language using English characters. The name shall contain the word "corporation," "incorporated," or "limited," or shall contain an abbreviation of one these words, or the word "company" or the abbreviation "Co." if that word or abbreviation is not immediately preceded by the word "and" or the character "&". The corporation shall not contain a word or phrase that indicates or implies that it is incorporated for a purpose other than a legal business purpose or its articles of incorporation. The name shall be distinguishable upon the records in the Office of the Secretary of State from the name of each domestic corporation, limited partnership, limited liability partnership, and limited liability company.
What is a subchapter S filing?
A subchapter S filing with the IRS allows for a corporation to mimic the tax structure of a LLC. In essence causing the tax structure to be a "pass through" taxable entity. This means all profits are recorded on the individuals' tax return. Filing form 2553 with the IRS accomplishes this tax structure.
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