The most important thing to know about operating a corporation is to leave a paper trail of the important business activities. Set forth below are some of the most common issues relating to the operations of a corporation.

1. Keep things Separate

As previously mentioned, it's important to keep the business and affairs of the corporation separate from the personal affairs of a stockholder, director and officer. This means setting up a separate bank account, maintaining separate records, and keeping separate books for accounting purposes.

2. Meetings

Directors need to hold periodic meetings, and shareholder must meet once per year to elect directors. Meetings can take place in person or by telephone. Be sure to make a written record of the items discussed and actions approved at the meetings.

Alternatively, you can just get all the directors (or a majority of the stockholders) to sign a statement approving corporate actions.

3. Assignment and Transfer of Ownership Interests

Generally, a stockholder is free to sell or transfer shares to anyone. However, with small corporations where the stockholders act more like partners and each is integral to the success of the company, you may wish to consider placing restrictions on the transfer of shares.

Stockholders sometimes enter into a buy-sell agreement, which gives the terms for when shares can be transferred or sold. A typical buy-sell agreement would state that if one stockholder seeks to sell shares to any third party, the other stockholders have a right of first refusal;

that is, the other stockholders may purchase those shares at the same price. Only if the other stockholders do not purchase those shares can a stockholder sell to a third party. Incorporating Solutions Group, Inc. gives you the option to add a buy-sell clause in the corporate bylaws.

4. Tax Forms and Licenses

Each corporation must obtain a federal tax identification number, which is similar to an individual's social security number. In addition, county and city business licenses may also be required. We will check with your city and county to see which type of licenses are needed.


All legal and tax professionals agree, if your business is not incorporated you may be throwing away thousands of dollars in tax savings and deductions.

In addition, all of your personal assets such as your home, cars, boats, savings, and investments are at risk and could be used to satisfy any lawsuits, debt or liability incurred by the business.

Forming a Corporation can provide the protection and tax savings needed to give you peace of mind and make your business even more successful and profitable.

Some Benefits Include...

Liability Protection

Properly forming and maintaining a corporation will provide personal shareholders of the corporation for any debt or liability incurred by the business. Personal liability of the shareholders is normally limited to the amount of money invested in the corporation.

Tax Advantages

Another important benefit is that a corporation can be structured many ways to provide substantial tax savings. You can minimize self-employment taxes and increase the number of allowable deductions lowering the taxes you pay on the income of the business. Many corporations structure retirement and tax deferred savings plans for their owners and employees, which can provide even greater tax savings.

Raising Capital

Sale of stock for the purposes of raising capital is often more attractive to investors than other forms of equity sales. A corporation can also issue Corporate Bonds to raise capital for expenditures without compromising the ownership of the business.

A corporation can be structured many ways to provide substantial tax savings.