A corporation is defined as a legal entity, usually for the purpose of conducting business. The corporate law refers to all of the legalities that can arise from conducting business. Corporations are vulnerable to a plethora of regulations. They are required to follow these rules to benefit from the tax and other advantages corporations receive. Most states mandate corporations to hold annual meetings with shareholders, and typically require frequent meetings with the board of directors and chief level staff. Many corporations keep attorneys on retainer and always have attorneys present for their meetings to make sure the corporation is compliant with all state and federal laws.
Corporations are different from other businesses like partnerships and LLCs in the sense that corporate laws will specifically apply to them. Some issues that arise in corporate law include labor and wage law issues, contract disputes, product liability lawsuits, intellectual property and tax laws. As a business grows, it will grow in complexities and liabilities. As the company started out, a single attorney may have sufficed to cover their legal issues. However, at the level of a corporation, it may be necessary to get a team of expert attorneys on retainer to routinely handle legal matters.Popular Phrases in Corporate Law
A C-Corporation is the most popular type of corporation. This is a business formation where the business profits are taxed separately from the owners. One of the advantages of C-Corporation is that if the business incurs financial trouble, the owners are not required to use personal finances to offset the loss. The C-Corporation is permitted an unlimited number of shareholders and can set the qualifications of who can become a shareholder for rights of ownership. One of the disadvantages of C-Corporation is that taxes on this type of business carries more complexities than other business formations.
S-Corporation is another type of business and is usually referenced as an "S-Corp." The main difference for an S-Corp is how they file with the IRS; they request to become a special type of corporation. Most businesses who opt for S-Corp do so in order to avoid being taxed twice. Therefore, S-Corporations do not pay an income tax, rather the income passes through to the shareholders, whom then have to pay the taxes on their personal returns. The tax structure is similar to that of a partnership, but this type of entity still provides most of the legal protections afforded to C-Corps.
Piercing the Corporate Veil
This is an act to impose accountability on members of a corporation. Responsibility can include personal liability on the company owners, shareholders, or chief level officers of a corporation.
Chief Executive Officer (CEO)
The chief decision maker of a company, appointed by the board of directors of the company.
Board of Directors (BOD)
A panel of individuals selected by the shareholders of a company to advise on the corporation's matters and appoint officersCalifornia and Corporation Law California Recognizes the Doctrine of General Corporation Law
This means that one or more individuals, partners, or members, may form a corporation. Under California corporate laws, shareholders and directors must sign off on articles such as:
- Filing an article of incorporation
- Agreeing on the name of the corporation
- Stating the purpose of the corporation
- The physical address of the corporation and the state in which they will file taxes
Incorporating a business is an exciting, challenging, and rewarding endeavor. An expert attorney can help you with the complexities of the incorporating process.
With expert legal advice you can learn about:
- The right type of incorporation for your business
- Leveraging the best tax advantages available to your business
- Advantages of having a board of directors for your business and what to look for in board members
- Advantages and disadvantages of being a privately/publicly held company
- Implications of incorporation for your legal and tax obligations
Our highly qualified team of attorneys offer many legal services. If we take on your case, it is because we believe in it and will not stop fighting for you.Find out More
We can offer you a free consultation and tell you our assessment, to let you know how we can advise you on legal matters of your business. Our consultants are standing by to advise you on the potential of our case. Do not waste another minute and give us a call today.