get the answers to the most common questions fast.
What is the difference between the different types of entities?
LLC (Limited Liability Company)
A Limited Liability Company, often called an LLC, is quickly becoming the most popular form of entity to start a business with. It is fairly easy to maintain & manage, yet still separates you from the business, which can protect you from personal liability.
A 'C Corporation' is a General For Profit Coropration that is taxed separately from it's owners and/or shareholders.
An 'S Corporation' (also called 'Sub-Chapter/S Corporation') starts as a General For-Profit Corporation upon filing the Articles of Incorporation with the state. Once formed, it can submit an election to become 'S Corporation' by submitting the Elections as a Small Business Corporation to the IRS. Once this filing is complete, the corporation is taxed like a small business (pass through taxation) instead of being taxed as a General For Profit Corporation.
Non Profit Corporation
A Not-for-profit entity is formed by filing Articles of Incorporation with the appropriate state agency. A Non Profit Corporation can apply for Federal Tax Exemption status under IRS Code 501 (c). This usually applies to religious, charitable, educational, literary, or scientific Non Profit entities.
A Professional Corporation
A Professional Corporation must be formed when doing business defined as "professional services". The Articles of Incorporation will have special language and title depending on the service. "Professional Services" usually consist of the following activities: Medical Services, Legal Services and Representation, Accounting and Financial Services, Architectural Services, as well as other professional services.
*Check out our simple Chart to compare the entity types side by side.
How will Simplecorp use my contact info and order info?
Your contact information will be used by the Simplecorp team solely for the purpose of communicating with you about your business name search and/or order. You can always designate someone other than the business owner(s) as a contact. You can also request finished documents be shipped to a different address if necessary.
I am an Accountant and/or Attorney filing on behalf of a client... can I be assigned as the contact?
We work with a lot of Accountants and Attorneys that will file on behalf of their clients. If you are a professional doing so, you can designate yourself as the contact person and you or your client as the person to receive the final documents.
What if the company name I provided isn't available?
If the provided name isn't available, Simplecorp will contact you to obtain additional names.
What are the state requirements for company names?
Depending on your state, some words may be required to be used in your legal corporation name. For Corporations, you are usually required to include Inc, Corp, or Incorporated. For Professional Corporations and Non Profit Corporations, different rules may apply depending on the type of business. Contact Us to get answers to your specific requirements.
Can I change the LLC or Corporation name later?
The name of your Corporation or LLC can change at any time by filing Articles of Amendment. We will gladly assist you with name changes and amendment filings.
Can I do business with a different name other than my company's official, legal name?
You definitely can. If you conduct business under any name other than the legal entity name, most states require additional DBA filings, including Fictitious, assumed or trade name filings.
I don’t want anyone to know the contact name or address… How easily searchable is this information?
Depending on the state of formation, your information may be searchable including business name, address, and contact/agent information. Though many states will accept a PO Box as a valid address, you may still be uncomfortable providing a name/address that is searchable. Simplecorp provides Registered Agent Services to prevent your personal name/address from showing on public searchable records.
I would like to prevent people looking up who owns the LLC or Corporation. Is this possible?
You can setup Simplecorp as your registered agent on file, which means public records won’t show your contact name and address. Instead, it will show Simplecorp’s legal name as your agent for service of process.
What is a Registered Agent?
A Registered Agent is a required agent representing the corporation or LLC who is officially designated at the time that incorporation or registration documents are filed in accordance with state requirements.
What is a Registered Agent responsible for?
A Registered Agent is responsible for receiving any legal papers on behalf of the corporation. A Registered Agent will act as the representative for accepting Service of Process served upon the company within the jurisdiction of any state where the company conducts business, and will also forward any and all official legal and tax correspondence from the state.
How important is it to set up a Registered Agent?
Designating a Registered Agent is a legal requirement and is treated as such by the state in which you are doing business.
What will happen if my company fails to register or designate and maintain a Registered Agent?
Failing to register and designate a registered agent may foreclose or hinder the company's ability to legally enter into contracts and gain access to the state courts. Failure to maintain a registered agent may cause your company to fall out of "good standing" within the state. This could inhibit your ability to do business within a state, and require monetary penalties to reinstate your company to a "good standing" again.
Can an entity act as its own Registered Agent?
An entity may not act as its own registered agent. Most businesses choose an independent third party such as Simplecorp to assist with this responsibility.
Why should I have Simplecorp be the Registered Agent?
Simplecorp meets all state requirements for a Registered Agent by designating an individual within our company to act as your Registered Agent. Simplecorp will receive and forward official state and federal correspondence as well as state franchise, tax returns or annual reports when received on your behalf.
What happens when I choose Simplecorp as my Registered Agent?
Most businesses choose a professional agent such as Simplecorp to assist with this duty. The main reason for this is you eliminate the maintenance of a constant registered office, it eliminates the costly obligation of changing the registered office location of the company with the state each time it relocates. Another popular reason for this is that having us as your Registered Agent gives you a level of privacy to prevent the need to deal with private process and also to protect your personal information.
Does Simplecorp's registered agent service require an annual fee?
We always include a free year of Registered Agent Service to all our new entities. After the first year, Simplecorp will charge a required small annual fee to serve as your Registered Agent.
Can the agent be in another state?
No, the registered agent must have a physical address in the state in which you are forming the LLC or Corporation.
Can I use a business name similar to another Entity?
Most states require that the proposed name of any newly forming corporation be distinguishable from the names of other state entities already on record with the state.
What if I a conducting Business under different names?
If you will be conducting business under other names in addition to the legal corporate name, most jurisdictions require that you file a DBA, Fictitious Name, Assumed Name, or Trade Name.
What are the differences between the shareholders, directors and officers of a Corporation?
Shareholders are the owners (Stakeholders) of the Corporation. The Directors are accountable for long-term management of the Corporation, and the Officers (President, Secretary, and Treasurer) are commonly responsible for day to day operational activities of the Corporation.
How many directors should I have?
Usually, states require corporations to have the minimum of one director. For Non Profit Corporations, however, some states require a minimum of three or five directors.
Can I use the same person as the President, Secretary and Treasurer?
Usually, the same person can hold all three titles and roles.
What is an incorporator? Is Simplecorp an Incorporator?
The incorporator is the person who signs the company's Articles of Incorporation and brings the company into existence. For Corporations & LLCs, in most states Simplecorp is the incorporator. For professional Corporations and Non Profit Corporations, we will help you designate an individual as the incorporator.
What is the DIRECTOR of a Corporation?
The director of a corporation is listed in the company's Articles of Incorporation and/or in the corporate bylaws. You can have multiple directors, but most states allow one individual to be the sole Director and/or Officer of the Corporation.
What are the OFFICERS of a Corporation?
Corporations usually have a President, Secretary, and Treasurer. Corporations may also appoint one or more Vice President and other officers. Here is a quick description of the main titles:
The President has the overall executive responsibility for the management of the corporation.
The Secretary is typically responsible for maintaining corporate records.
The Treasurer is responsible for controlling and recording its finances and maintaining corporate accounts.
What is a "member" of an LLC?
A member of an LLC is listed in the company's Articles of Organization and/or in an internal Operating Agreement. Members may include individuals, corporations, other LLCs and foreign entities. Usually, like in a corporation, one person can be the "single member" of an LLC. A member usually is a contributor and owns a percentage or all of the LLC.
Can we add or remove LLC members later?
LLC members can be added or removed later by a decision of the current members. When this happens, it should be recorded in the LLC’s Operating Agreement and reflected in the information sent to the state.
We can submit these changes in the annual report, or submit an Article of Amendment to their Articles of Organization in your state. Simplecorp can file Amendments and Annual Reports for your LLC.
Does a LLC member have to be an employee?
No, an LLC member does not have to be an employee, but certainly can be an employee of the company.
How many members can an LLC have?
Most states have no limit on the number of members an LLC can have. Members may include individuals, corporations, other LLCs and foreign entities.
What is the Fiscal Year End Date?
Most corporations use a calendar year as their fiscal year. In some cases, a company may not want to use a calendar year. We recommend speaking with an accountant before choosing a different fiscal year.
What is the annual meeting date?
To retain corporate existence, one must observe corporate formalities such as holding an annual meeting and recording corporate minutes. If a company fails to observe corporate formalities, shareholders may be held personally liable for corporate debts. The default ‘annual meeting date’ for corporation is the second Tuesday of March. However, you can select any other date that works for you.
What are “Authorized Shares”?
This figure represents the total number of shares that your corporation is AUTHORIZED to issue. Your corporation is not required to issue ALL of the authorized shares.
What is “par value”?
Par Value is the MINIMUM dollar amount PER SHARE at which your corporation may issue shares to shareholders. This dollar amount does not indicate the actual value per share. Corporate shares are usually issued to shareholders at a price ABOVE par value to reflect its market value.
Does a LLCs Percentage owned affect the percentage of Profit Distribution? Are they the same?
Each member's percentage owned and percentage of Profit Distribution in the LLC is defined by the company's Operating Agreement. They can be different amounts. The operating agreement should outline each member's voting rights, money distribution and profit distribution.
What if we don't want voting rights or financial rights tied to contributions?
Voting rights and financial rights can be organized to meet the specifications of your LLC. They do not need to be equal to each other. These rules should be outlined in the Operating Agreement.
How are members paid? Do members get a salary and/or Distributions?
There can be both salary and Distributions to members. Money can be distributed to members at any time and is not considered a salary. However, If a member is also an employee, he or she should receive a regular salary.
What is an EIN used for?
The Employer Identification Number (EIN, also called Federal Tax ID#) is a federal requirement for all LLCs & Corporations for tax purposes. It’s also necessary for other business purposes, like opening a bank account for the business. Instead of identifying an individual, it identifies a business entity itself.
Who should be the signer of a Corporation or LLC?
The signer can be any officer of the corporation, or any member of the LLC.
Is a social security number required to obtain an EIN?
Yes, for obtaining an EIN, the social security number of the signer is required by the IRS to assign a Tax ID number.
What if I don't know the number of employees, or first date when wages will be paid?
Enter your best estimate of the number of employees you will need in the next 12 months, and the first calendar date on which you expect to pay them.
What is an S-Corp?
An S-Corp is the same as a C-Corp, except it is taxed differently. An S-Corp is taxed similar to an LLC, where Income taxes are reported and paid by the owners rather than the company itself.
How is an S-Corp formed?
All S-Corps come into existence as C-Corps initially. To become an S-Corp, an election must be made with IRS within a given period. In most cases, the election must be made within 75 days.
What are the requirements of an S-Corp?
In order to qualify as an S-Corp, the corporation must be a domestic corporation with only one class of stock and no more than 100 shareholders. In addition, shareholders must be individuals, estates, certain exempt organizations or trusts and must be US citizens.
What are the state filing fees for?
The “State Filing Fees” are state required filing fees that Simplecorp passes directly to the proper government agency on your behalf.
What’s the benefit of having Simplecorp file the Initial and/or Annual Reports?
Typically, an initial report must be filed with the state once the corporation is formed. In most states, an annual or biennial report is also required. More importantly, if they’re not filed on time, there are penalties and consequences. By having Simplecorp help satisfy these report filing requirements, you can be assured that the initial and ongoing reports will be filed appropriately and timely on your behalf.
What happens if I do not file an Initial and/or Annual Reports on time?
If reports are not filed on time, the company can lose its good standing and significant state legal protections. The company may even be involuntarily dissolved by the state.
When are initial and Annual Reports due?
Due dates vary by state. Many states require that annual reports be filed on each anniversary of the corporation or LLC or by some other specific date each year. By using our Business Maintenance Service, Simplecorp will automatically prepare documents and file them by the due date.
What is the Company Seal/Embosser used for?
Many states require an entity to comply with the formality of stamping all official documents with a seal.
It is a customized, hand-held, steel embosser that displays your company's name, state of formation, and year of formation.
What is the LLC “Customized Operating Agreement”?
We will help you produce a customized LLC Operating Agreement, which will help you to define your company’s operating terms and help protect your legal rights and responsibilities.
What is the “Customized Bylaws and Minutes”?
We will help produce customized corporate bylaws, which are the rules that govern the day-to-day operations of the Corporation. Our customized Bylaws will help you define your corporation's operating terms and help protect your legal rights and responsibilities.
What if I want to make changes to my order I placed?
If you would like to make changes after you place your order, give us a call immediately since we work diligently to file and submit all the appropriate documentation as soon as we receive the order.
If I have special instructions for my order, where can I put them?
Any special instructions regarding your order can be entered in the notes section during checkout.
Do I have to accept the terms and conditions to place an order?
Yes, in order to complete your order you must read and agree to the terms and conditions.
What type of payment do you accept?
We accept American Express, Discover, MasterCard and Visa online. Please call us directly for special forms of payment, or if you have questions during checkout! We’ll be happy to help :)