Incorporate your business for free
If a corporation is large and sells its shares to many individuals, it may have to register with the securities and exchange commission or state regulatory bodies. More common is the corporation with only a few shareholders, which can issue its shares without any such registration under private offering exemptions. For a small corporation, responsibilities of the shareholders can be defined in the corporate minutes, and a shareholder who wants to leave can be accommodated without many legal hassles. Also, until your small corporation has operated successfully for many years, you will most likely still have to accept personal liability for any loans made by banks or other lenders to your corporation.
Shares of stock can be transferred directly to new investors, or when larger offerings to the public are involved, Singapore company registration services the services of brokerage firms and stock exchanges are called upon. It is always nice to know that the ownership interest you have in a business can be readily sold, transferred, or given away to another family member. The process of divesting yourself of ownership in proprietorships and partnerships can be cumbersome and costly. Property has to be retitled, new deeds drawn, and other administrative steps taken any time the slightest change of ownership occurs. With corporations, all of the individual owners' rights and privileges are represented by the shares of stock they hold. Large public corporations are listed on stock exchanges, such as the new york stock exchange , and anyone can access a wide range of financial and operational data about each company.
Corporations, if properly formed, capitalized and operated , limit the liability of their shareholders. Even if the corporation is not successful or is held liable for damages in a lawsuit, the most a shareholder can lose is his or her investment in the stock. The shareholder's personal assets are not on the line for corporate liabilities.
A corporate structure is perhaps the most advantageous way to start a business because the corporation exists as a separate entity. In general, a corporation has all the legal rights of an individual, except for the right to vote and certain other limitations. Corporations are given the right to exist by the state that issues their charter. If you incorporate in one state to take advantage of liberal corporate laws but do business in another state, you'll have to file for "Qualification" in the state in which you wish to operate the business. There is usually a fee that must be paid to qualify to do business in a state. Once you're incorporated, be sure to follow the rules of incorporation.
If you don't, a court can pierce the corporate veil and hold you and the other owners personally liable for the business's debts. Once your articles of incorporation are accepted, the secretary of state's office will send you a certificate of incorporation. It is usually much easier to attract new investors into a corporate entity because of limited liability and the easy transferability of shares.