What is a Corporation?
A Corporation is an organization,
recognized and created by law, which allows people to associate
together for a common purpose under a common name. One of the
main advantages of a corporation is the fact that its owners are
protected by the corporate veil from frivolous lawsuits and
other intrusions and are not liable for the debts of the
corporation beyond their investment. Security that is not
available through other forms of business organizations
(individual proprietorship, partnerships etc.).
But please understand that while a corporation offers protection
from creditors, it does not relieve you of wrongful acts, which
you might personally be liable for.
The actual owners of the corporation receive stock certificates,
which manifest their specific share in the corporation. The
corporation can issue shares of stock with either a par (shares
with a predetermined dollar value) or a no-par value (shares
without a predetermined dollar value).
Example: You are forming a 1 Mio Dollar corporation with us and
you want to issue stocks in the amount of 1 Mio Dollars. Then
each stock certificate will read:
"$ 1 Million authorized Capital, 1 Million shares of $ 1 Par
Value". ( There are 2 more important issues that need to be
recognized. Please call us for further details ).
The stock certificates are numbered and each certificate bears
the name of its respective owner and the amount of stock
certificates this specific document represents. All stock
certificates need to be signed by the president and the
secretary of the corporation. Please be advised that Bearer
shares are illegal in the United States.
Initially the shareholders will elect
their representatives and the Board of Directors, which in
general consists of 3 directors one of whom is the chairman of
the board. The Board of Directors appoints the officers like the
president, vice president, secretary and treasurer. It is also
possible to appoint the directors for these officer positions.
This, for example, is one of the reasons why we prefer Nevada as
the main location of incorporation, because in Nevada a single
person can hold all positions
(3 directors, president, vice president, treasurer and secretary).
During the formation of your corporation
we suggest not to establish a specific purpose for the
corporation so you can change your activities later at any time
without having to form a new corporation. As the best form of
incorporation we suggest the "Open Corporation", with no
limitations on the number of shareholders or re-sale of stock
(though not to more than 35 investors within the USA, without
state and federal registration), - and once your corporation has
increased in size you can easily transform it into a "Public
Corporation."
With a Public Corporation the company shares are bought and sold
on the various U.S. stock exchanges such as the New York Stock
Exchange (NYSE), NASDAQ, American Stock Exchange, the regional
exchanges, or the OTC (over the counter market). Receiving the
approval from the stock exchange is not a very difficult
process, convincing the public of the value of your stocks is
far harder. Shareholders are only interested in your stock if
the dividend is good or your company shows a very promising
future perspective.
When the time comes our experts will be
more than happy to assist you with any questions or concerns you
might have. You will enjoy the feeling of having qualified
personnel on your side.
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What is Capitalization?
For many people the
possibility of Capitalization their
US Corporation is the deciding
factor of incorporating in the first place.
What does
Capitalization mean?
Your new corporation is initially
only worth as much as the capital you invested. Let's assume you
invested $ 10,000.00 into your new company and authorized
100,000 Stock Certificates, then each of your Stock Certificates
would have a value of 10 cents. These Stock Certificates could
be used by your bank as collateral for a loan.
So the amount of
your credit/loan in the first phase of operation
in which you have not conducted any business or generated any
profits, will not extend the amount of the collateral ( $ 10,000 ).
You can provide the bank with additional security for example
Patents, Rental Agreements, proof of income from other
investments or already signed Sales Orders in order to receive
further credits from your bank.
- This is called Capitalization through Bank Loans -
Of course you can also sell your
Stock Certificated to friends or relatives. Most likely only
people who know you and have faith in your abilities as a
business person will buy them. The restrictions that exist in the
United States which only allow you to sell your Certificates to a
maximum of 35 investors. That does not apply to foreign ownership,
therefore unless you a are a United States Citizen you will be
able to sell to as many investors as you can find. The easiest
and best route to find investors is to scan the ads in
newspapers which focus on Investments such as the Wall Street
Journal or the Investors Business Daily. At this moment you should have a
written statement at your disposal explaining your product's and
your business plan in detail. This statement has to be approved
for example by the department of "Wertpapierhandel in
Frankfurt". (provided you are a German resident/citizen). If not,
we will help you find the appropriate organization in your
country.
- This is called Capitalization through sales of stocks to
private parties -
People in the United States are more open to venture capital and
risk taking and quite willing to invest their monies in start-up
companies with a promising future and a chance of high returns
on their investment. Therefore it is easier to find investors in
the US than in most other countries. Often these people -and
institutions- become partners in young companies and take
positions on the board. These positions enable them to see
exactly how their funds are being used, which in turn makes them
more willing investors than for example banks.
- This is called Capitalization through venture capital -
To approach the
approximately 2000 venture capitalists in the
US directly is a good way to
locate potential investors, but it is much more complicated than
often advertised. Please contact us if you would like to chose
this route.
In case your company does not have the funds needed to grow and
to expand but you already have a
business plan laid out, we would be more than happy to check
your plans and give you our expert advice how to find what you
are looking for.
You can always contact our
president Werner
Schilling Ph.D. He is an
economist and always glad to give advice.
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What are
steps to incorporate?
After you have decided what
kind of corporation and in which state you
like to have your US corporation being registered, we prepare and file the "Articles of Incorporation" and pay
the initial State fees.
After the registration process is completed your corporation
will be required by State law to hold its first "Directors
Meeting" in which bylaws are adopted
and the "Officers" are elected.
At the meeting stock certificates can
be distributed to shareholders and
their names be recorded in the "Corporate Ledger". This
Ledger is best kept in the hands of your tax accountant or in
our safekeeping.
If you company is registered in Nevada the
meetings can take place in our office in Las Vegas. You
don't have to be present
at the meeting if you have given us proxy's
prior to the meeting.
Dr. Schilling Consulting is proud to inform
that we are one of the very few companies in
this business which include the
above procedures in all of
their services without any additional
charges.
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Which are the best locations to incorporate?
Generally you should incorporate in the
state where your office is physically located, but this is not a
state requirement. For example you could have your principal
location in Las Vegas, Nevada and enjoy its liberal tax laws (
no State income tax ) and at the same time establish a
subsidiary corporation in another US State or for that matter
anywhere in the world.
As follows you will find a
compilation of various US States, listing the advantages and
disadvantages of incorporating in these locations:
Oregon
Oregon has eliminated all sales
tax and is a great location for companies, which are planning
on a large amount of purchases. Overall you can save up to
10%. The State income tax can be avoided using the principle
mentioned in the first paragraph.
Texas
Texas is also an interesting
location based on the fact that the sales tax has also been
eliminated, but you will not enjoy the same level of privacy
Nevada has to offer.
Utah
Well known for its large
population of Mormons and for that reason only recommended for
those with similar or equal convictions. You will be required
to pay State income taxes.
Florida
What makes this state so
interesting is the fact that all workers are exempt from State
income tax but not corporations. Again this can be legally
avoided with an additional address in Nevada. The question is
only: Why not go to Nevada in the first place?
Montana
Basically the same situation as in
Oregon. No sales tax.
Nevada
Nevada does not allow the IRS to
examine the books of Nevada corporations. Since a large
portion of its income is generated through the countless
casinos and hotel chains and it does not depend on any outside
financial assistance, corporate information is only furnished
with great hesitation - generally only if criminal activities
are suspected.
In our opinion Nevada is the
ideal location for any corporation wishing to minimize taxes
legally. But it is your decision.
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What is the
purpose of the "Registered Agent"?
State laws require that a corporation
maintains a permanent contact person (agent) in the state of
incorporation to receive official documents and legal notices.
This person is called the registered agent, whose name and
office address are included in the Articles of Incorporation
which in turn serves as a public announcement where to send
important information and documents. ( tax forms, annual report
forms etc. ) For obvious reasons your choice of a dependable and
trustworthy registered agent is extremely important and we
strongly suggest only to delegate this duty to somebody in whom
you have complete confidence.
For the same reason we only work with
people from our own company or with qualified personnel that has
been approved and registered by the State. In many cases we
employ retirees who have many years of previous experience
working in a similar environment and are looking for an
additional source of income.
In each State for which we offer
Incorporation Services Dr. Schilling Consulting has either an
office with its own employees or an agent working exclusively
for us.
Dr. Schilling Consulting will provide
Registered Agent Service unless you indicate otherwise and you
will have our guarantee that this service will be executed to
your complete satisfaction.
Our Registered Agent Service
include:
- We will forward any official
documents to the location of your choice. (postage
will be charged separately).
- We will continue to file all
necessary documents for your corporation in a timely fashion
and answer any questions you might have.
- We are your main hub for all your
business related needs.
If you do not retain Dr. Schilling
Consulting as your registered agent, we will charge you a
one-time fee of $ 100.00.
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Advantages of a Corporation
Incorporation provides many benefits.
One of its greatest advantages is the fact that it can help
limit your personal liability as a business owner. Typically,
shareholders are not liable for the debts and obligations of the
corporation and creditors must satisfy their claims by seizing
the assets of the corporation rather than your personal assets.
As is not the case in a partnership or sole proprietorship where
the owner is personally responsible for all liabilities of the
business and the owner's personal assets may be used to pay
debts of the business.
A US Corporation is recognized by law as a legal person with
many of the same rights that individuals have. The corporation
can also buy investment property
( for example real estate, machinery or other equipment etc.),
which can be rented or leased to other companies ( not
excluding a company that you also own ).
The Corporation can legally operate worldwide without ( as
mentioned above ) the personal risks and can serve as parent,
affiliate, subsidiary company, or as a holding, consulting, or
trust company.
We are well informed regarding the rules and regulations of
other countries in this matter and will include these in your
contract. We do not offer any shelf companies but rather prefer
to tailor your corporation to your very specific needs in order
to ensure your complete satisfaction.
If you should choose to expand or change the purpose of your
corporation in the future, you will also have the flexibility to
do so without having to form a new company.
All it takes is the approval of your shareholders.
Further advantages are:
- Ownership of a corporation is easily
transferable.
- Greater tax deductions for health insurance and Medical
expenses.
- Retirement Funds, which are sheltered from tax
liabilities, can be set up with ease through the help of a
corporation.
- Lower payments for Social Security and Medicare tax.
- Greater opportunity to raise capital through the issuance
of stock.
- The life of a corporation does not depend on the life of
its members. Shareholders are allowed to sell their shares
without special permission
( provided this was stipulated during the initial process of
incorporation ) and the corporation continues to exist.
- And many other advantages.
Please
contact us,
so we can discuss which form of corporation will be most
suitable for you.
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Is a Lawyer required for the Incorporation
Process?
No, the use of an attorney to form a
corporation is not required by state law.
We suggest that you familiarize
yourself with the advantages and disadvantages of incorporating
in the USA ( we will gladly send you additional information on
the subject), and then contact the company of your choice to
assist you in the incorporation process. Dr. Schilling
Consulting would, for example, be a great place to start.
The process of forming a corporation is relatively easy and can
be found in any book dealing with the formation of companies.
Why do I need Dr. Schilling Consulting then, will probably be
your next question? Although the process of creating a
corporation is not complicated there are quite a few obstacles
that have to be overcome successfully in order to prevent
possible problems in the future. Here you can take advantage of
our expertise.
What are the "obstacles" we are
talking about?
It is fundamental to know and understand what you are planning
to do with your corporation. Only once we have discussed this
issue in detail with you, will we be able to form the specific
corporation that will suit your needs in every aspect. No matter
what you decide, the basic cost of forming the corporation will
stay the same. Why not choose one that fulfills your needs right
from the start?
Lawyers are often involved in many
different activities all at once and are generally more
interested in clients that promise to yield a higher return for
them. We are specialized in forming corporations and are not
distracted by other activities. Our employees and associates all
have the same intentions: to be available for your questions and
concerns and to help solve your problems efficiently and
permanently.
We are confident that you will have a comfortable and pleasant
experience while taking advantage of our services.
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Which documents need to be prepared and
filed?
Dr. Schilling Consulting will prepare
and file all documents needed to set up your corporation in its
entirety. All we ask is, that you fill out
completely our orderform
and send it to us.
And please do not be afraid of any
hidden fees. Our prices include all document filing fees. We will prepare and file your articles of
incorporation in the state of your choice, pay all
applicable fees to the proper authorities and handle all other
details connected with the forming of your corporation.
Besides filling out our orderform all
that is left for you to do is sit back and enjoy your newfound
recognition and prestige that comes with owning your own
US corporation.
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How much does it cost?
In
comparison to many other countries the initial cost to form a US
Corporation is relatively minor. In Germany for instance a very
similar entity called GmbH is far more complicated and expensive
to form. For example, should you choose the most basic and
inexpensive form of incorporation, you can set up a "shell
company" in Delaware for less than $1000.00. But realistically
this kind of company will most likely not suit any of your
needs.
Generally the basic costs to form a
corporation depend on your stock capital, which means that a $
100,000.00 corporation is less expensive than a
$ 10,000,000.00 corporation. The applicable fees are directly
related to the amount of authorized stock capital. ( Gladly we
will send you the appropriate tables ).
It doesn't make much sense to form a $1
Million company hoping it has an internal value. The value of a company
is fixed by its assets and that is cash respectively
receivables, stocks, real estate
and other assets. A $1 Million company with no money
in the bank is still a company with $0 value and no bank in the
world would extend any credit to such an enterprise. It is also
relatively easy to find out how much a US company is worth.
There are a lot of sources which will provide anybody with that
kind of information. Honesty and hard work will always get you a
lot further than pretense.
So please don't get distracted by false
advertising.
Here one more remark in regards
to the example of Delaware:
Delaware used to be a very popular state to form corporations, because a single person was able to hold all offices
of a corporation and the "actual owners" were able to maintain
their anonymity. These days other states offer the same
advantage and much more and therefore Delaware is not our first
choice anymore.
We offer 2
Services which can also be tailored to your individual
needs. Our Packages have been assembled in a way that suits the
needs of the majority of our customers. Our prices reflect all
costs and you do not have to be afraid of any hidden or
subsequent charges.
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How will my tax situation be affected?
Generally all income generated in the
USA is subject to US taxation. The highest tax rate in the US is
only approximately 39%, in Germany for instance this amount
could be much higher ( up to 53% ).
Example:
If a US Corporation generates net profits up to $50 000 the tax
rate will be 15%. Profits up to $75 000 carry a tax rate of 25%,
up to $100 000 a rate of 34% and profits in access of $335 000
will be subject to a 39% tax payment.
The business activities of a Corporation registered in the USA
are not limited to its geographical boundaries but rather can
now be conducted and expanded worldwide. You can bill your
customers in any part of the world and ask for the payments to
be sent to your US Bank Account. Since you will have online
access to your accounts the Internet will give you constant
control over all incoming and outgoing funds and you will know
immediately when your money arrives.
Also your US Corporation can "consult"
any of your other companies for example in Germany and the costs
can be billed to the German company. Absolute requirement for
such transactions is that your US Corporation actually is active
and its existence can be proven. For instance the "Deutsche
Finanzamt" ( Equivalent to the American IRS ) only accepts
foreign expenses, if it can be proven that the company
requesting the payments -which in turn are supposed to be paid
by its German counterpart- is in fact a legitimate company.
We offer the above Service in our Supreme
Service. Your
Corporation will have a proper and operational Office and you
will have access to "your" office anytime ( upon prior
arrangement ). Furthermore you will be able to conduct meetings,
your telephone will be answered, your address is listed in the
local directory, you will receive your mail punctually, you have
a "Resident Agent" and you will be coached by our staff.
Don't you feel more relaxed already?
We want to protect you from illegitimate activities and are
absolutely focused on helping you to take advantage of all
possibilities allowed by law.
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If you have
specific questions which are not answered above, please feel
free to send them to us, we will respond very shortly.
Please contact us
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