Why form a Tennessee Corporation?
Forming a Tennessee corporation is a great way to protect your personal assets and separate your personal entity from your company. This means that the corporation is a completely separate tax entity from the owner. Corporations are the most formal business entity and they have greater tax reporting responsibilities than other business entities.
Other advantages of forming a corporation
In forming a corporation entity, you are separating yourself from the corporation itself. This means you are not liable for any of the company’s debts. If the corporation gets sued for any reason, your personal assets will be completely separated from your company assets. The existence of the corporation may also be registered as perpetual, since there is no time limit or “life” for the corporation. .
Naming tips for your corporation
Corporation names must include a designator which can be Inc, Corp, Incorporated, or Corporation. Corporation names must include a designator, which can be Corporation, Incorporated, or its abbreviation. A business name is considered available if the name is distinguishable from any other active entities listed in the Business Services database. Names must be distinguishable from other corporations, LLCs and LLPs. The company name is not distinguishable by differences in punctuation, conjunctions, or prepositions. Also, the name is not distinguishable by using different legal descriptions such as Inc vs. Corp vs. Incorporated etc. Restricted words include Mortgage, Bank, Trust, Credit Union, and Cemetery (if business is a cemetery for humans), these restricted words would require consent from the appropriate state department prior to filing with for the articles of organization.
Steps to maintaining Good Standing
To maintain your corporation in “good standing”, you must hold annual shareholder meetings or minutes. These must be recorded and kept in your file. Annual fees vary from state to state. If you fail to follow these formalities and properly document your annual meetings, this can place your corporate status in jeopardy.
How do I set up a company as a subchapter S corporation?
The shareholders of a Subchapter S corporation must receive dividends according to the number of shares they own. Incorporate Fast will prepare the S-Corp application (form 2553) for you so that you may submit with the IRS.
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