 |
Piett and Wright Las Vegas Attorneys at Law
|
509 South 7th Street Las Vegas, NV 89101 Phone: 1-702-566-1212 Fax: 1-702-566-4833 Toll Free: 866-373-0012 E-mail: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it |
| Corporations |
|
The most common and well-known business entity, the corporation is governed by the state in which it is incorporated and may also be governed by the laws of the state in which the corporation does business. Corporations are treated as entities separate from their owners and shareholders. In this way, corporations can do nearly everything natural persons can – transact business, sue and be sued, buy and sell real and personal property, and enter into contracts. Corporations are formed with the intent to be ongoing, beyond the death of any of its shareholders or owners. This provides an advantage in that the corporation’s existence is not dependent on the life span of any of its members. To form a corporation, one must file Articles of Incorporation with the Secretary of State. Shareholders are usually issued stock certificates reflecting their percentage ownership share in the business. The corporation also has the option of adopting Bylaws, which are rules of self-governance that will guide the growth and development of the business. Our business law attorneys can assist you in drafting these Bylaws to help ensure the success of your business. The management of a corporation is often directed by a Board of Directors. The initial slate of directors can be dictated in the Articles, bylaws, or chosen by the incorporators. Thereafter, directors are elected by the shareholders at the annual shareholders meeting. The directors can then choose officers, who manage the day-to-day operations of the corporation. A shareholder’s personal liability is limited to the amount the shareholder has invested in the corporation. Shareholders, directors, and officers are not liable for the debts of the corporation or for the illegal conduct of one another. A standard corporation, also known as a “C” corporation, is a separate tax-paying entity for federal tax purposes and is subject to double taxation as follows: the corporation’s profit is taxed once when attributed to the corporation and taxed again when the profits are distributed to the shareholders as dividends. Subchapter S Corporations Corporations may elect to be taxed as a Subchapter “S” corporation and be treated as a partnership for most tax purposes. As such, the income, losses, deductions, and credits of the S corporation are passed through to its shareholders and are reflected on the shareholders’ individual tax returns. In this manner, the profits are only taxed once, when they “flow through” to the personal tax returns. |