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The Delaware "C" Corporation

General Corporation

Open a Delaware Corporation

The General Corporation is the most common corporate structure. This type of corporation is a separate legal entity that is owned by stockholders. It is commonly referred to as a "C" Corporation. All corporations, no matter what state are filed as a "C" Corporation. For US citizens who would like to be taxed as a Corporation but would like to take tax advantages offered by an LLC, they can convert the "C" Corporation to an "S" Corporation to take profits and/or losses on their personal tax return using Form 2553. Since an international client does not file a personal tax return with the IRS, an LLC or an "S" Corporation serves them no purpose.

A General Corporation may have an unlimited number of stockholders that, due to the separate legal nature of the corporation, are protected from the creditors of the business. A stockholder's personal liability is usually limited to the amount of investment in the corporation and no more.

Corporations are required to perform certain formalities such as holding annual meetings and keeping detailed corporate records (minutes). However, corporate meetings and records can be held and kept anywhere in the world.

Advantages

Owners' personal assets are protected from business debt and liability

Corporations have unlimited life extending beyond the illness or death of the owners

Tax-free benefits such as insurance, travel, and retirement plan deductions

Shares of stock owned by individuals outside the State are not subject to any Delaware taxes.

  Easier to raise capital through the sale of stocks and bonds.

Change of ownership does not affect shares of stock owned by individuals outside the State

Transfer of ownership facilitated by the sale of shares of stock is not subject to any Delaware taxes.

Disadvantages

Can be more expensive to form than proprietorship or partnerships

More legal formality

More state and federal rules and regulations

To Be Incorporated The Name of the Corporation Must Include One of the Following:

Incorporated or Inc.
Corporation or Corp.
Association
Institute
Union
Limited or Ltd.
Club
Foundation
Fund
Society
Syndicate

 

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