Myths About Incorporation

Dispelling the Myths: Facts about Incorporating

MYTH

My business is too small to be incorporated.

FACT

No business is too small to incorporate. You owe it to yourself to take advantage of the tax savings and the limited liability protection afforded by incorporation.

 

MYTH

Starting a Corporation or Limited Liability Company (LLC) is expensive and time consuming.

FACT

Not at all. CorpAmerica is here to help you keep the costs down and guide you each step of the way. It takes just a few minutes to complete our online application. The minimal costs to get started are well worth the peace of mind you will gain knowing you have our experts to assist you as well as limited liability protection for your personal assets.

 

MYTH

I'm a sole proprietor and I can't incorporate if I don't have employees.

FACT

Not so. No state requires a corporation or LLC to have more than one owner, or to have employees.

Keep in mind, that if you operate as a sole proprietorship or general partnership, you're personally responsible for any business debts or lawsuits against your business. Basically, almost anything you own can be at risk. If you incorporate you will be able to maintain separate business and personal identities. So if you're incorporated and remain in compliance, your personal assets should be protected from any liability incurred by your business.

MYTH

Corporations are always taxed twice.

FACT

Not necessarily. If your C Corporation is small and does not pay dividends to its shareholders, then it is taxed only once on its profits. This is also true of S Corporation structures, where the taxes are filed on the owners' personal returns. If, however, a C Corporation pays dividends to its shareholders, these distributions are taxed in addition to the profits of the business.

 

MYTH

Sole proprietors never need a business license.

FACT

Never say never. In nearly every state, most businesses need a basic business license or permit to run a business. Nearly all businesses need some form of state, county or local license. A general license will allow the business owner to operate their business within the guidelines of the state, county, or local municipality.  CorpAmerica can research which business licenses and permits you need.

 

For Business Owners Who Live Outside the US

MYTH

I would need to become a US citizen and live there in order to incorporate in the United States.

FACT

This is not true. The US has made provisions that allow foreign citizens to operate businesses in America. CorpAmerica has three distinct incorporation packages to serve our International customers.

 

MYTH

It's too expensive for an International company to incorporate in the United States.

FACT

Not any more. The US wants to encourage entrepreneurs from across the globe to incorporate in America. The costs are kept low to help new companies succeed. Some states do not have a minimum requirement for the capitalization amount to ensure all business sizes are welcome.  CorpAmerica is the low cost leader in business formation services and we have three International packages to meet your budget and needs.

 

MYTH

The process to incorporate in the United States is too lengthy.

FACT

Not at all. The United States encourages new International business ventures and seeks ways to reduce barriers for new corporations to operate. An entrepreneur looking to incorporate in the US will find it a relatively simple process, with experts to guide you along the way. Let CorpAmerica help you get started today.

 

MYTH

Corporation compliance requirements are too time consuming and bureaucratic.

FACT

The corporation compliance requirements are not difficult to maintain. The documentation to be filed will vary from state to state; however, you will need to keep accurate and complete files on the day-to-day operation of your business. Proper tax filings and legal documents are not meant to be bureaucratic, just specific to what is the norm for a particular state. Interestingly, many foreigners setting up companies in the United States find that there are fewer legal requirements here than in their own countries.

 

MYTH

I will be taxed multiple times if I incorporate in the United States.

FACT

Not necessarily. Most countries have signed agreements with the US to prevent income from being taxed twice. Some companies have benefited because the tax rate may be lower in their base country.

Did you know?

Selecting and registering a Web site domain name early in the incorporation process will ensure its availability when you are ready to promote your business online.