How to Incorporate: A Handbook for Entrepreneurs and Professionals

by Diamond, Michael R.; Williams, Julie L.

• ISBN13: 9780471585862
• ISBN10: 0471585866
• Format: Hardcover
• Copyright: 1993-08-01
• Publisher: John Wiley & Sons Inc

Table of Contents

Introduction	p. 1
The Corporation	p. 3
What Is a Corporation?	p. 3
Corporate Structure	p. 5
Profit and Nonprofit Corporations	p. 7
Why Choose a Profit Corporation?	p. 9
Disadvantages of a Profit Corporation	p. 11
Choice of Form	p. 13
Sole Proprietorship	p. 13
General Partnership	p. 14
Limited Partnership	p. 16
Preincorporation Activities and Incorporation	p. 19
Preincorporation Agreements	p. 19
Preincorporation Share Subscriptions	p. 21
Incorporation	p. 22
Financial Structure	p. 23
Debt Securities	p. 23
Equity Securities	p. 26
The Choice between Issuing Debt or Equity	p. 30
Selling Securities	p. 32
Dividends	p. 35
Types of Dividends	p. 35
Financial Considerations	p. 36
Stock Splits	p. 37
Considerations of Corporate Control	p. 39
Shareholders	p. 39
Directors	p. 46
Officers	p. 48
Articles of Incorporation	p. 51
Heading	p. 51
First Article - Name	p. 52
Second Article - Duration	p. 52
Third Article - Purpose	p. 52
Fourth Article - Stock	p. 53
Fifth Article - Classes of Shares	p. 55
Sixth Article - Series of Classes	p. 57
Seventh Article - Preemptive Rights	p. 58
Eighth Article - Special Provisions	p. 59
Ninth Article - Registered Office and Agent	p. 60
Tenth Article - Board of Directors	p. 60
Eleventh Article - Incorporators	p. 61
Bylaws	p. 63
Section One - Offices	p. 64
Section Two - Shareholders	p. 64
Section Three - Directors	p. 69
Section Four - Officers	p. 75
Section Five - Financial Matters	p. 79
Section Six - Share Certificate	p. 80
Section Seven - Fiscal Year	p. 81
Section Eight - Corporate Seal	p. 82
Section Nine - Notice Requirements	p. 82
Section Ten - Procedures for Amendments	p. 82
Section Eleven - Committees	p. 83
Corporate Operations	p. 87
Governmental Relations	p. 88
Record Keeping	p. 89
Piercing the Corporate Veil	p. 90
Taxes	p. 91
Federal Income Taxes	p. 91
Tax Procedures	p. 94
Subchapter S and Other Tax Options for a Small Business	p. 97
Tax Drawbacks of Incorporation	p. 97
Subchapter S Corporations	p. 100
Eligibility Requirements for Subchapter S Status	p. 106
Electing Subchapter S Status	p. 109
Taxation of the S Corporation and Its Shareholders	p. 112
Section 1244 Stock	p. 115
Debt Financing	p. 116
The Tax Reform Act of 1986	p. 118
Taking Funds from the Corporation	p. 123
Corporate Capitalization with Debt	p. 124
Shareholder Leases to the Corporation	p. 128
Acquisition by the Corporation of Goods and Services Available to the Shareholders	p. 130
Executive Compensation	p. 135
Salaries, Fees, and Bonuses	p. 138
Health and Life Insurance	p. 140
Qualification and Nondiscrimination Requirements	p. 142
Other Fringe Benefits	p. 144
Employee Benefit Plans	p. 146
Securities	p. 155
The 1933 Act: Registration and Exemption	p. 156
The 1934 Act	p. 157
App. 1. Sample Preincorporation Agreement	p. 159
App. 2. Application for Reservation of Corporate Name	p. 161
App. 3. Articles of Incorporation (General)	p. 163
App. 4. Articles of Incorporation (California)	p. 167
App. 5. Certificate of Incorporation (Delaware)	p. 169
App. 6. Articles of Incorporation (Washington, D.C.)	p. 171
App. 7. Articles of Incorporation (Maryland)	p. 175
App. 8. Certificate of Incorporation (New York)	p. 177
App. 9. Articles of Incorporation (Wisconsin)	p. 179
App. 10. Stock Certificate	p. 183
App. 11. Bylaws	p. 187
App. 12. Minutes of Organization Meeting of Board of Directors	p. 205
App. 13. Offer to Purchase Shares	p. 209
App. 14. Board Resolution Accepting Offer to Purchase Shares	p. 211
App. 15. Waiver of Notice of Annual Meeting of Shareholders	p. 213
App. 16. Proxy for Annual Meeting of Shareholders	p. 215
App. 17. Minutes of First Meeting of Shareholders	p. 217
App. 18. Shareholders' Agreement	p. 219
App. 19. Voting Trust Agreement	p. 223
App. 20. Comparison Chart - Model Act and Statutes	p. 227
App. 21. Application for Employer Identification Number, Form SS-4	p. 231
App. 22. Instructions for Form SS-4	p. 233
App. 23. Election by a Small Business Corporation, Form 2553	p. 237
App. 24. Instructions for Form 2553	p. 241
App. 25. Application for Automatic Extension of Time to File Corporation Income Tax Return, Form 7004	p. 245
App. 26. U.S. Corporation Income Tax Return, Form 1120	p. 247
App. 27. U.S. Corporation Short-Form Income Tax Return, Form 1120-A	p. 253
App. 28. U.S. Income Tax Return for an S Corporation, Form 1120S	p. 257
App. 29. Schedule K-1 (Form 1120S), Shareholder's Share of Income, Credits, Deductions, Etc.	p. 263
App. 30. Instructions for Schedule K-1 (Form 1120S)	p. 267
App. 31. Employer's Quarterly Federal Tax Return, Form 941	p. 277
App. 32. U.S. Partnership Return of Income, Form 1065	p. 281
App. 33. Schedule K (Form 1065), Partners' Shares of Income, Credits, Deductions, Etc.	p. 283
App. 34. Schedule K-1 (Form 1065), Partner's Share of Income, Credits, Deductions, Etc.	p. 285
Index	p. 289
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