Separate Entity from the Owners
A corporation is a legal entity that is separate and exclusive of its owners.
Unlike a sole proprietorship or partnership, a corporation offers more opportunity to borrow from banks and take advantage of larger tax exemptions.
STEPS TO START
Select a Corporate Name
Draft and File Articles of Incorporation
Create Corporate Bylaws
Draft a Shareholder's Agreement
Maintain Corporate Minutes
Issue Shares of Stock
Obtain an Employer Identification Number
Select a Tax Election
Obtain Required Licenses and Permits
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"How to Start a Corporation: A 9-Step Guide" | Quickbooks/Intuit
PROS & CONS
OF STARTING A CORPORATE ENTITY
PROTECTION FROM LEGAL LIABILITY
Once incorporated, owners have limited liability for the corporation's business activities, debts and expenses.
MORE ATTRACTIVE TO INVESTORS
Corporations can sell stocks, making the venture more attractive to investors
A POWERFUL BUSINESS STRUCTURE
Corporations have tools like employees, management, directors and share holders. Levels of the structure help run the entire company as a whole.
Corporations can hire a larger group of employees and offer stock options which helps the company profit at a larger, quicker rate
TIME & COST
The time it takes to start and fund a corporation is a massive undertaking
Corporations are required to have meetings with directors, deal with extensive amounts of paperwork and adhere to regulations that require professional legal expertise