Intricacies in Forming a Corporation

Business organizations have always been viewed as a convenient way of providing means to easier and more convenient transactions, this owing to the fact that business organizations have been created to foster a transaction separate and distinct from those that have created it.

Business organizations have always been viewed as a convenient way of providing means to easier and more convenient transactions, this owing to the fact that business organizations have been created to foster a transaction separate and distinct from those that have created it. This is what is known in corporation law as the veil of corporate fiction.

Corporations have been established in this nature, the fact that what is considered as a liability of those forming it, is not considered as a liability of the corporation, and the liabilities of the corporation are also not considered as liabilities of the people forming the same.

The convenient nature of corporations can be derived from the fact that the creation of corporations is also considered as one of the most tedious and taxing processes in the formation of business organizations.

There are several requisites that must be followed to the letter before a business organization may be considered, and wanting one of these requisites would actually lead to the non-approval of an application for incorporation.

A corporation may be either a stock corporation or a non-stock corporation. A stock corporation is one where the primary purpose for establishing the same is to promote an economic or business interest. Hence, the main reason why a stock corporation is established is in order to derive profit from its operations.

A non-stock corporation meanwhile is a corporation created for the primary purpose of uplifting a noble or a charitable cause. It is not created to acquire profit or to promote economic interest but it is actually created for social welfare reasons.

The creation of stock corporations is independent on so many requisites. One particular requisite is that it must comply with the minimum number of incorporators. Incorporators are those that initially compose the corporation. They are whose hands and names are included in the Articles of Incorporation as the original members of the corporation. To be named as an incorporator you need to have acquired at least one share of the capital stock.

Another essential requisite in the creation of corporations is the making of a valid Articles of Incorporation. An Articles of Incorporation actually includes all necessary data in the formation of the corporation, to include, the reason why it was created, the amount of capital stock, the amount of paid-up capital, and the names and addresses of the incorporators. These are merely some of the requisites in the formation of corporations.

For more information about corporation establishment, visit our Los Angeles Business Lawyers website at http://www.mesrianilaw.com/Corporation-Establishment.html

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2 Responses

  1. I am considering opening up an internet business and I would like to know which state I should create the corporation and what is the best type of business license for my internet business. I have read many articles about incorporation and I’m more confused now then ever.

  2. If you are looking to open up an internet company consider an LLC. An LLC (limited liability company) is probably the easiest and least expensive. It will also protect you from personally getting sued. I think the best state would be Delaware. Also check out Nevada and New York as alternatives. Don’t worry if you don’t reside in those states, as you can still create the LLC within that state.

    Good luck in your new venture!

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