Attorneys for Forming Incorporations
Are you ready to form a corporation? Are you not sure whether to form an LLC or a corporation? Are you considering the pros and cons of various corporate entities? Are you trying to figure out the issues surrounding your Shareholder Agreement? Are you looking for experienced legal advice at an affordable price and not just an online incorporation service? The business lawyers of Hale Ball have helped many, many business owners sort out the complexities of which entity is the RIGHT entity for your situation.
The business attorneys at Hale Ball will meet with you in person, will discuss the various options that are available to you, and will help you choose the right entity to begin your business endeavors. We will not only help you form your corporate entity but will also guide you through the maze of standard issues each business faces in order to begin operations in a lawful manner. We will review with you the 25 critical steps you need to take to assure the lawful operation of your business.
Please read below if you are looking for basic information on corporations and corporate structure.
All corporations follow a universally consistent structure. Each corporation in Virginia has shareholders, directors, officers, and employees.
Shareholders elect directors and receive distributions. They do not become involved in the day to day management of the company. They are required to approve major actions such as the sale of all or substantially all of the company’s assets and will make all major policy decisions of the corporation. They also approve all major decisions of the corporation.
Officers have the responsibility for all the day to day operations of the company as authorized by the board of directors. The same person can hold all three offices.
Corporate meetings. Virginia law requires the shareholders to meet once a year to elect the directors. The directors should meet as necessary for the guidance of the corporation. Meetings can be conducted in person or by conference call, or a combination of both.
Corporate formalities. Each year, each corporation has to file an annual report with the State Corporation Commission. It also has to pay an annual fee to the State Corporation Commission. The amount of the fee depends upon the number of authorized shares of the corporation.
Compensation. A corporation must pay a reasonable salary to the officers. A corporation should make an annual distribution of profit. The balance between the amount of salary and the amount of distributions is difficult to reach, and you should consult with your accountant to comply with the IRS regulations.
Tax status. A corporation can elect to be taxed as a C corporation or an S corporation. Profits of a C corporation are first taxed within the corporation, and then the distributions are taxed at the shareholder’s level (i.e., double taxation). An S corporation is a “pass-through” entity, which means that the profit of the corporation passes through the corporation (and is not taxed within the corporation). Rather, the profit is taxed at the shareholder level. Generally, qualifying small businesses will elect to be an S corporation to avoid double taxation issues. The decision as to which type of corporation is right for you should be reached with your accountant. Legally, there is no difference between the operational performance and function of a corporation that has elected IRS Sub Chapter S tax treatment and those that remain as C-Corporations.
If you have a question about any type of business matter, we encourage you to schedule a confidential consultation with one of our Northern Virginia lawyers. To make an appointment call us at the above telephone number 1-703-591-4900 or use the contact form below.
Since 1980 the AV-rated law firm of Hale Ball has served the legal needs of individuals and businesses. Our team of attorneys include lawyers named to Super Lawyer and Rising Star lists, as well as attorneys with advanced legal degrees, specialty certifications and lawyers who teach their areas of practice to other lawyers.
Use the contact form on this page to schedule a consultation, or call 703-591-4900.
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10511 Judicial Dr
Fairfax, VA 22030