A corporation is a business entity recognized independently from the people who own, control and manage it. A corporation has nearly all the same rights as an individual; they’re given the right to exist by each state’s respective charter.
In forming a corporation, shareholders exchange money, property, and other resources for the corporation’s capitol stock. After incorporation, stock is issued to the company’s shareholders in exchange for money or other assets. A board of directors oversees the corporation and it’s various business dealings.
Corporations take deductions similar to a sole proprietorship to figure its taxable income. However, corporations enjoy state specific deductions, as well as special right, privileges, legal powers, and liabilities.
What’s more, corporations limit the liability of their shareholders. In the event the corporation is not successful, the most a shareholder will lose is their investment in the stock. Personal assets of shareholders are not considered corporate liabilities.
All corporations must obtain what is known as an Employer Identification Number (EIN), also called a Federal Tax ID number.
The Internal Revenue Service (IRS) uses EINs to distinguish various business entities, including corporations, partnerships and limited liability companies.
Your corporation’s EIN is a nine-digit number specific to your company. An EIN is the corporate equivalent to a social security number.
Before you can legally operate as a corporation, you must apply for Federal Tax ID. Our online forms are easy to read and quick to navigate, and we work hard to get your Tax ID number to you quickly and professionally.