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Business Formation

WHY SHOULD I FORM A CORPORATION OR A LIMITED LIABILITY COMPANY?

By far, the most compelling reason for incorporating or forming a limited liability company (LLC) is protection of the individual shareholder’s or individual member’s personal assets from any debts of the corporation or LLC and any creditor claims made against the business.  Keep in mind, however, at the outset of new business, if a lending institution extends a loan to the business, it almost invariably seeks the personal guaranty of the shareholder or member to repay the loan if the business fails to do so.  There are numerous websites which fully explain why people seek to incorporate or organize a LLC.  Just GOOGLE: “reasons for incorporating” or “reasons for forming LLC”.

 

SHOULD I FORM A CORPORATION OR A LIMITED LIABILITY COMPANY?

THAT IS FOR YOU TO DECIDE after a consideration of your specific circumstances and consultation with your accountant or financial advisor.  We will not advise you one way or another but do list some of the factors that need to be considered before making the decision.

 

With respect to corporations, you and your financial advisor must decide on whether you should file the company’s income taxes as a “C” corporation or a Subchapter S corporation.  Corporate profits are not subject to Social Security and Medicare taxes
and corporations are more accepted because LLCs are a fairly new development. Corporations can offer a greater variety of fringe benefits with fewer taxes such as retirement, stock option and employee stock purchase plan. Fringe benefits, such as group-term life insurance, medical reimbursement plans and medical insurance premiums, in C corporations, are free from taxes at this time.  Corporations must hold regular meetings of the Board of Directors and the Shareholders and keep written records of the meetings.

 

With respect to limited liability companies, members and managers of the LLC need not hold regular meetings, which are called according to the operating agreement.  The members of the LLC who are active participants in an LLC’s business can deduct operating losses against their regular income to the extent permitted by law and the LLC itself can deduct operating losses.  LLCs can elect to be treated as a corporation for tax purposes. Once again, there are numerous websites out there which fully explain the “pros and cons” of forming either entity. Simply GOOGLE: “choosing between corporation and LLC”.

 

IF I CHOOSE TO FORM A LIMITED LIABILITY COMPANY, HOW MUCH DO I PAY YOU AND WHAT DO YOU DO FOR THE MONEY?

Our fee is $400 and includes payment of the $100 initial registration fee to the State Corporation Commission, filing for and obtaining the certificate of organization for the LLC and supplying you with the initial operating agreement which provides for the operation of the business.  The operating agreement includes information about the LLC itself, including the name, type/description of services, how long the LLC will be in business, and office address. It includes the membership class, capital contribution, percentage of ownership, and the share of profits and losses for each member. The agreement also deals with a member’s departure from the LLC, how assets are distributed if the company dissolves, and how new members are admitted. It designates how and by whom the company will be managed and how important decisions may be made in regular meetings of the members.

 

IF I CHOOSE TO FORM A CORPORATION, HOW MUCH DO I PAY YOU AND WHAT DO YOU DO FOR THE MONEY?

Our fee is $500 and includes payment of the $75 initial registration fee to the State Corporation Commission (SCC), filing the initial articles of incorporation with the SCC, obtaining the corporate charter, and purchasing the corporate kit and stock certificates for the company.  Once we receive the corporate kit, and we have conferred with you by telephone, we will send it to you with the By-Laws of the corporation and the minutes of the organizational meeting of the Board of Directors, which you will conduct at your convenience, and must conduct in order to begin the legal existence of the corporation.

 

HOW DO I RETAIN YOU TO GET MY COMPANY ORGANIZED?

The online limited liability company formation questionnaire and engagement letter are available here. The online corporation formation questionnaire and engagement letter are available here.  Please feel free to call us at 540-943-0932 or email us at info@aftonlaw.com to ask us to mail you the engagement letter and either questionnaire.  Sign and complete both of them and snail mail or email them to Bruce K. Tyler, P.C., 129 Afton Depot Lane, Afton VA 22920 or info@aftonlaw.com, along with either $400 or $500.  We are able to send you a PayPal invoice if you prefer to pay by credit card; just let us know.  OR electronically initial the engagement letter, complete the questionnaire online and pay either $400 or $500 by using PayPal.  Once we receive the corporate charter or articles of organization from the State Corporation Corporation, we will quickly proceed to getting your business underway.

 

 

Contact Us

129 Afton Depot Lane

Afton, Virginia 22920

(540) 943-0932

info@aftonlaw.com

 

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  Email us     Call: 888-254-9188

 

Contact Us

129 Afton Depot Lane

Afton, Virginia 22920

(540) 943-0932

info@aftonlaw.com