Category: Incorporation
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How to Make a Late Election for S-Corporation Status
Filing for S-corporation status with the IRS requires compliance with strict time guidelines. Form 2553 must be filed by the 15th day of the third month after your corporation’s fiscal year. For most corporations, that means you must file by March 15 for the S-Corporation election to be effective for the current fiscal year. If…
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Top 5 Reasons to Incorporate in Delaware
Corporation-friendly law is just one reason your startup should incorporate in Delaware
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Why Bylaws are Important for Your New Company
If you’re forming a corporation, you should treat your bylaws as required infrastructure, not ceremonial paperwork. The short version: bylaws are the rulebook that makes your board and stockholder actions valid, keeps governance disputes from turning into existential ones, and gives investors and acquirers confidence that your company can actually make decisions the way it…
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The Theory Behind Subchapter S
Subchapter S status was enacted so that startup companies and other entrepreneurs would not shy away from choosing a corporate form of organization because of the potential for double taxation. A corporation that elects Subchapter S status is treated for federal income tax purposes as a partnership, but maintaining the corporate advantage of limited liability…
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Call Your First Organizational Meeting Sooner than Later
Running a startup, you have a billion things to do. Don’t forget to add “First Organizational Meeting” to your to-do list. This meeting should take place after the issuance (or effective date) of your certificate of incorporation. But don’t wait too long, as you have some important business to handle, such as: adopting share certificates,…
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Where to Incorporate
After you have made the decision to incorporate, the next question is “where to incoporate?” You can incorporate in your own state and be considered a domestic corporation, or you can incorporate elsewhere and do business in your own state as a foreign corporation. Generally, if most of your business will be conducted in your…
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Every Situation is Unique When Choosing an Entity
If you’re choosing between an LLC and a Delaware C-Corp for your startup, here’s the direct answer: if you plan to raise venture capital, issue equity broadly, or ever want a clean acquisition process, you will usually end up as a Delaware C-Corp—either immediately or after an expensive “we should’ve done this earlier” conversion. If you’re…