The Law Offices of John S. Saletta P.C.
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Forming a Corporation
You can incorporate in any of the 50 states. Delaware is the popular state because of its history, experience, popularity and pro-business climate. Over half of the companies listed on the New York Stock Exchange are incorporated in Delaware. Recently, Nevada has also gained popularity due to its pro-business environment and lack of a formal information-sharing agreement with the IRS. Neither Delaware nor Nevada have corporate income taxes, and business filings in these states can usually be performed more quickly than in other states. Many people also choose to incorporate in their home state. This may save you money because the corporation will not need to register as a "foreign corporation" if it does business in its home state, and there is often no need to pay another person to serve as the registered agent. However, if your home state has a high corporate income tax or high corporate fees, and your corporation will not "do business" in that state, it may be wise to incorporate elsewhere. "Doing business" means more than just selling products or making passive investments in that state - it usually requires having an office or otherwise having an active business presence. Saletta.Com allows you to choose among California, Nevada or Delaware corporations. In general, the name of a corporation does not need to end with "incorporated", "corporation", "corp." or "inc." (unless the corporate name is a name of a person, which requires the addition of a corporate ending). Please note that a name will not be accepted if it is likely to mislead the public or if it too closely resembles the name of another corporation formed in that state. Before you choose the name, you should do a little research to see if the name is taken. Check Yellowpages.com, Switchboard.com or the Secretary of State of the state you wish to form your corporation. Saletta.Com allows you to choose up to three names, in order of preference. If the name of the corporation is used in connection with goods or services, you may wish to consider obtaining federal trademark protection for the name. This ensures that no one else in the U.S. may use that name in connection with the same general type of goods or services (except in areas where someone else is already using that name). A corporation is managed by the board of directors, not directly by the shareholders. The board must approve major business decisions. A director can be, but is not required to be, either a shareholder or an officer. Like representatives in congress, directors are elected by the shareholders and typically serve for a one-year term. Each corporation must have at least one director. Examples of procedures which must be approved by the board of directors include:
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