Starting a corporation in Indiana is not an easy task. Before you start the process, you must have an understanding of what a corporation is, what the benefits of starting a corporation are, and what steps you must go through to register your company.
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What is a Corporation?
A corporation is a legal entity that is separate from its owners. It is created by filing articles of incorporation with the Indiana Secretary of State. The corporation is owned by shareholders who receive dividends and have a say in the company's operations. A board of directors is elected by the shareholders and manages the day-to-day operations of the company.
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The biggest advantage of a corporation is that it limits the liability of its owners. If the corporation goes bankrupt or is sued, the owners are only liable for the amount of money invested in the company. Personal assets, such as a house or a car, cannot be seized to pay off any debts.
Benefits of starting a corporation in Indiana
There are many advantages to starting a corporation in Indiana, such as:
1. Limited Liability: As mentioned earlier, a corporation limits the liability of its owners. Business debts, creditors or any legal disputes wouldn't personally affect the owner's assets.
2. Professional Credibility: A well-structured corporation provides an impression of a more substantial and well-established business to clients and partners.
3. Tax benefits- With the S Corporation election, the business and individual can evade double taxation as income or losses pass through for tax purposes. Corporation has certain tax benefits such as claim deduction of operating expenses, salaries paid to employees etc.
4. Potential Access to More Capital with investors. Venture capitalists are less inclined to fund businesses without the protection of a corporation because with net losses they can escape personal liability in regards to the corporation.
Steps to register a business in Indiana
1. Research and Choose a Corporate Name: The first thing you need to do is decide on your company name and make sure it's available in the state in which you want to incorporate your business.
2. Choose Your Company Type: In Indiana, you can form either a C Corporation or an S Corporation.
3. Appoint Directors with the Statement of Purpose drafting - You need a minimum of one director, with one registered agent to represent the corporation. There are law firms that usually assist cos in filling out blank spots in Articles but their opinions and minutes requested will typically be given ad additional expense.
4. File the articles of incorporation - Electronic and paper copies of Indiana's articles of incorporation must be filed with the Indiana Secretary of State along with the fee ($100-$200) And decide what stock type and value you will hold for voting and nonvoting shares.
5. Registered tax details and EIN - Licensed corporate income tax details must be given from the Indiana Department of Revenue. As it is mandatory in all U.S different states EIN (Employer Identification Number) needs to be acquired from U.S government's internal Revenue Service (IRS) selecting desirable taxations concerning which corporation structure which will identify the entities established purpose for tax and regulatory control.
6. Approval of Bylaws - Corporation bylaws provide rules around how the corporations will manage itself or how they will fill vacancies, elect or remove directors etc.
Finally, after the creation of a corporation, keeping records of annual meetings of shareholders or paying the annual Indiana written report fee and staying up to state regulatory structure should be guaranteed particular to each corporations or type of corporations.
Conclusion
Forming a corporation in Indiana can be a crucial decision for a business, yet a rewarding one. You can inquire about and hire a legal representative to navigate ambiguities during the registration procedure to prevent faults. Through registering and handling regulatory adaptiveness of a corporation's structure, in conjunction with investment partner fees it is nevertheless the owners decision to be up to date on financial trends and internal affairs controlling functions. With the above guidance in effect, you will be well ensured of the first steps to building legitimacy for success as a corporation.
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