Before deciding which type of corporation best suits your business needs, always consult with your legal or financial advisors. Global Corporate Services, Inc. is a registered agent in the State of Delaware and does not offer legal or tax advice. We are here to help you start your new business as quickly and cost effectively as possible. 

For more detailed information, please be sure to speak with a qualified legal and/or financial advisor. You may address your questions to our Tax and Accounting Services at tax@delawarecorp.us. 

General Corporation 

The general corporation is the most common corporate structure. This type of corporation is a separate legal entity that is owned by stockholders. 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.

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

• Transfer of ownership facilitated by sale of shares of stock owned by individuals outside the State are not subject to any Delaware taxes.

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

• Change of ownership need not affect shares of stock owned by individuals outside the State are not subject to any Delaware taxes. management

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

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

 Disadvantages

• More expensive to form than proprietorship or partnerships

• More legal formality

• More state and federal rules and regulations

What is a Close Corporation?

There are a few minor, but significant, differences between general corporations and close corporations. In most states where they are recognized, close corporations are limited to 30 to 50 stockholders. In addition, many close corporation statutes require that the directors of a close corporation must first offer the shares to existing stockholders before selling to new shareholders.

This type of corporation is particularly well suited for a group of individuals who will own the corporation with some members actively involved in the management and other members only involved on a limited or indirect level.

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

For information on a Sub S" Corporation click here.