What are the Primary Types of Corporations?
Business incorporation has a lot of benefits for corporations of all sorts in Edmonton regardless of their size or type. Deciding for the right type of corporation for certain activity is next to any decision regarding the benefits of business incorporation outweighing costs.
Here are the types of corporations from which you can choose:
C Corporation, also called General for Profit Corporation, is considered as the most common corporate entity owned by shareholders. In this corporate type, the Board of Directors appoints corporate officers managing daily business operations. Corporation shares are transferable for free unless a shareholder agreement limits. Indefinitely, corporations exist unless and until they are dissolved. They are taxed separately, which is why they need to file their own tax return and pay corporate taxes on their profits. The number of shareholders necessary in C Corporation is without limit.
Like C Corporation, incorporators in S Corporation need to file an Article of incorporation with the state’s office. S Corporation conducts an election, which can be taxed as a pass-through entity pursuant to the Internal Revenue Code subchapter S. It has limited ownership of up to 100 shareholders; each should be a trust or an individual. There are corporate penalty taxes and alternative minimum tax not applicable to any S corporation. Thus, their taxation resembles to that of partnerships. Checkout more information on this type of corporation and learn the art of enterprise buying or selling in online resources such as those offering business for sale Edmonton.
Non Profit Corporation
Nonprofit organizations are groups formed for educational, literary, scientific, religious or charitable purposes. These organizations use surplus revenues to achieve their goals rather than distributing them as dividends or profit. Revenues need to be retained for expansion, plans or preservation of organizations. Corporate assets should be distributed to any other qualified non-profit group. Non-profit organisations may also be restricted from being involved in activities like substantial lobbying engagement and political campaign participation.
Limited Liability Company or LLC
LLCs are considered as the flexible form of corporation that combines corporate structures and partnership. They serve as a legal form of a corporation offering limited liability to owners in the Edmonton area and the whole of Canada. They share the limited liability characteristic with a corporation and the characteristic of pass-through income taxation availability they share with partnerships. They are usually more flexible than corporations are and are suitable for companies with a single business owner.
Obviously, this type of corporation offers clients a professional service. Professional Corporations offer professional service and professionals have special filing requirements when they are incorporating. Among the professional services usually offered are law firms or attorneys, physicians or doctors, certified public accountants or accounting professionals, architects, and other licensed professionals. The requirements for the corporate filing of professionals corporations may differ and may be less or more expansive in Edmonton. Laws governing these corporations are usually complex.
With these forms of corporations, you will surely have an idea what type your company belongs or you want your company to be if you are just starting your own in Edmonton.