Frequently Asked Questions
Business Entity Types FAQs
How many people are needed to form an LLC?
An LLC must have a minimum of one member. There is nothing specifying a maximum number of members.
What happens when I order a non-profit corporation formation from CorpCo?
You will receive confirmation of your order by email. At the same time, CorpCo will receive and review your request for accuracy and will begin preparing the necessary paperwork. If you are applying for 501(c)3 status with the IRS, we will require further information and will contact you to request those details. CorpCo will draft your formation document and send to you for review and the signature of the person to act as incorporator. The filing is then submitted to the state for processing. If your order includes Express Processing, it will take priority over other routine requests which means a faster processing time. While turnaround times vary greatly from state to state, routine processing is generally about 7-10 days. With CorpCo’s Express Processing, orders can be completed in as little as 24-48 hours in many states. Once your company has been approved by the state, CorpCo will send confirmation of filing which usually includes a file-stamped copy of the filing. If your company formation package includes a corporate kit, CorpCo will ship the kit under separate cover within 3-5 days of company formation.
What is the difference between a member and a manager?
In an LLC, the member is the owner of the company (like the shareholder of a corporation). The member has contributed to the company and has a vested interest. The manager of an LLC is someone who has been appointed by the members to handle the affairs of the business (similar to the director of a corporation). The manager may, but is not required to be a member.
Who can be the member of an LLC?
Typically, there are no restrictions regarding membership of an LLC. A member can be a corporation or other business entity. It is not necessary for the business entity to be a US business. Of course, the member can also be a natural person. If the member is a natural person, some states require that the person be 18 years or older. There is no requirement for a member who is a natural person to be a US resident or citizen.
What is a Limited Liability Company (LLC)?
A Limited Liability Company (LLC) is a type of business structure which has characteristics of both a sole-proprietorship and a corporation. LLCs are able to be treated as a partnership or sole-proprietorship for taxation purposes while offering the personal liability protection of similar to that of a corporation. Owners of an LLC are called members. Most states do not restrict ownership, and so members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit “single-member” LLCs, those having only one owner. A few types of businesses generally cannot be LLCs, such as banks and insurance companies. Check your state’s requirements and the federal tax regulations for further information. There are special rules for foreign LLCs.
I want to file for tax-exempt status. What makes this type of filing different?
In order to file for tax-exempt status with the IRS, your non-profit incorporation documents must reflect the details required by the IRS. These details include, but may not be limited to a specific business purpose which indicates that the company is exclusively organized for charitable purposes and an indication as to how the assets of the company will be distributed upon its dissolution.
What happens when I order an S-Corporation formation from CorpCo?
You will receive confirmation of your order by email. At the same time, CorpCo will receive and review your request for accuracy and will begin preparing the necessary paperwork. CorpCo will draft your formation document and act as the organizer. The filing is then submitted to the state for processing. If your order includes Express Processing, it will take priority over other routine requests which means a faster processing time. While turnaround times vary greatly from state to state, routine processing is generally about 7-10 days. With CorpCo’s Express Processing, orders can be completed in as little as 24-48 hours in many states. Once your company has been approved by the state, CorpCo will send confirmation of filing which usually includes a file-stamped copy of the filing and an instrument of organization. If your company formation package includes a corporate kit, CorpCo will ship the kit under separate cover within 3-5 days of company formation. The incorporation process is the same as the process to form a C-Corporation. In other words, the filings with the state do not look different for a C- Corporation or an S-Corporation. The difference in the two corporation types takes place with the federal (IRS) or state revenue division filings.
What is Form 2553 and how do I file it?
The 2553 is the IRS tax status election form which is required if a corporation wishes to be treated as an S-Corporation for tax purposes. This form must be filed within 75 days of the date of formation (or start of business), within 75 days of a new tax year, or any time during the year before the year the election should be effective.
What is required to keep my company active?
Each state has varying requirements for keeping the company active/in good standing. Most will require some sort of annual filing which may require company details and usually involve a filing fee. In some states, failure to file an annual tax return may also result in the company becoming inactive (not in good standing).
What is required to form an S-Corp?
In order to form an S-Corporation, Articles of Incorporation (sometimes referred to as a Certificate of Incorporation) must be filed with the state where the S- Corporation is to be formed. The Articles of Incorporation will require basic information about the company such as the proposed name, registered agent name and address, principal office address, and business purpose. CorpCo takes care of the preparation and filing of this document and can provide registered agent services in all 50 US States as well as the District of Columbia. At the level of taxation, S-Status is not automatically assumed. It will be necessary to elect to be treated this way with the federal government by filing a form 2553 with the IRS. In addition to this special requirement with the IRS, the company may also be required to elect to be treated as an S-Corporation on the state level by filing a special form with that state’s revenue department.