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. A corporation provides
security that is not available through other forms of business
organization (individual proprietorship, partnerships, etc.).
But please understand that while a corporation offers
protection from creditors, it does not relieve you of wrongful
acts for which you might be personally liable.
The actual owners of the corporation receive stock
certificates which represent 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 million corporation
with us and you want to issue stocks in the amount of $1
million — each stock certificate will then read: "$1
million authorized capital, 1 million shares of $1 par value."
(There are two additional 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 (or carries no name)
and the number of shares 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
three directors, one of whom is the chairman of the board. The
board of directors appoints the officers such as the president,
vice president, secretary, and treasurer. It is also possible
to appoint the directors to these offices. This, for example,
is one of the reasons we prefer Nevada as the main location
for incorporation; because in Nevada a single person can hold
all positions (three directors, president, vice president,
treasurer, and secretary).
During the formation of your corporation we suggest that
you avoid establishing a specific purpose for the corporation.
This allows you to 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 the
re-sale of stock (however, within the United States, both
state and federal registration are required for more than 35
investors). As your business increases 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 US 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 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 if your company shows a very
promising potential.
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, trustworthy
personnel on your side.
back to top
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?
For many people the possibility of capitalizing their US
corporation is the deciding factor.
What does capitalization mean?
Your new corporation is initially only worth as much as the
capital you invest. Let's assume you invest $10,000.00 in your
new company and authorize 100,000 stock certificates. Each of
your stock certificates would then have a value of 10 cents.
These stock certificates could be used by your bank as
collateral for a loan so that the amount of your credit/loan
in the first phase of operation — as you have not yet
conducted any business nor generated any profits — will not
exceed the amount of collateral ($10,000). In order to receive
a larger credit line from your bank, you can provide items of
additional security; e.g. patents, rental agreements, proof of
income from other investments, or signed sales orders.
This is called capitalization through bank loans.
Of course, you can also sell your stock certificates 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 only
allow you to sell your certificates to a maximum of 35
investors. That does not apply to foreign ownership. Therefore
(unless you are a US citizen), you will be able to sell to as
many investors as you can find. The easiest and best route to
finding investors is to scan the ads in newspapers such as the
Wall Street Journal or the Investors Business Daily, which
focus on Investments.
This is called capitalization through sales of shares to
private parties.
If you are a German resident/citizen, you will need to
prepare a written statement describing your products and your
business plan in detail. This statement has to be approved, by
the Department of Wertpapierhandel in Frankfurt. If you are a
citizen/resident of another country, we will help you find the
appropriate organization in your country.
People in the United States are more open to venture
capital deals and to risk-taking and are quite willing to
invest their monies in start-up companies that indicate a
promising future and a chance of high returns on their
investment. Therefore, it is easier to find investors in the
United States 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 banks might be.
This is called capitalization through venture capital.
Directly approaching the approximately two thousand venture
capitalists in the United States 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
choose this route.
If your company does not have all of 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 on how to find what you are
looking for.
You can always contact our
president Werner
Schilling Ph.D. He is an entrepreneur and an economist and
is always glad to give advice.
back to top
What are
steps to incorporate?
After you have decided what kind of corporation you want
— and in which state you want to register your US
corporation — we will 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 recorded in the corporate ledger.
This ledger is best kept in the hands of your tax accountant
or in our safekeeping.
If your company is registered in Nevada, the meetings can take
place in our Las Vegas office. If you have given us proxies
prior to the meeting, you don't even have to be present at the
meeting.
Dr. Schilling Consulting is proud to announce that we are
one of the very few companies in this business that includes
the above procedures in their package of services — without
any additional charges.
back to top
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.
Following are several US states, detailing the advantages
and disadvantages of incorporating in these locations:
Oregon
Oregon has eliminated all sales tax and is a great location
for companies that anticipate a large volume of purchases.
Overall you can save up to 10 percent. The state income tax
can be avoided using the principle mentioned in the first
paragraph.
Texas
Texas is another interesting location based on the fact that
here the sales tax has also been eliminated. However, you will
not enjoy the same level of privacy that Nevada offers.
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 countless casinos and hotel chains and because it does
not depend on any outside financial assistance, corporate
information is only furnished with great hesitation — and
generally, only if criminal activities are suspected.
In our opinion, Nevada is the ideal location for any
corporation wishing to legally minimize taxes. But the final
decision is yours.
back to top
What is the
purpose of the "Registered Agent"?
State laws require that a corporation maintain a permanent
contact person (agent) in the state of incorporation to
receive official documents and legal notices. This person is
called the registered agent, and their name and office address
are included in the articles of incorporation, which in turn
serves as a public announcement of where to send important
information and documents; e.g. 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 delegating this duty to someone in whom
you have complete confidence.
For the same reason, we only work with people from our own
company or with qualified personnel who have been approved and
registered by the state. In many cases, we employ retirees who
have years of previous experience working in a similar
environment and who 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
Services — unless you indicate otherwise — and you have
our guarantee that this service will be executed to your
complete satisfaction.
Our Registered Agent Service
include:
- Forwarding any official documents to the location of your
choice.
(postage will be charged separately)
- Filing all necessary documents for your corporation in a
timely fashion and answering any questions you might have.
- Functioning as 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.
back to top
Advantages of a Corporation
Incorporation provides many benefits. One of the 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. This 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
the debts of the business.
A US corporation is recognized by law as a legal entity
with many of the same rights that individuals have. The
corporation can also buy investment property; e.g. real estate,
machinery, or other equipment which can be rented or leased to
other companies — including a company that you also own.
Again, the corporation can legally operate worldwide
without 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 these matters and will include these in
your contract. We do not offer any shelf companies. We 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.
Some 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 a corporation.
- Lower payments for Social Security and Medicare tax.Lower
payments for Social Security and Medicare tax.
- Greater opportunity to raise capital through the issuance
of shares.
- 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.
back to top
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 United
States (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 incorporation is relatively easy and can be
found in any book dealing with the formation of companies.
Your next question will probably be, “then why do I need Dr.
Schilling Consulting?” 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
avoid possible problems in the future. Take advantage of our
expertise.
back to top
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 after 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 respect. No matter what you decide, the basic cost of
forming the corporation will stay the same. Why not choose the
one that fulfills your needs right from the start?
Lawyers are often very busy; involved in many different
activities all at once, and generally more interested in
clients who promise to yield a higher return for them. We
specialize 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 successful and
pleasant experience while taking advantage of our expert
services.
back to top
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 you need to do is completely fill out our order form and
send it to us.
And please, don’t be worried about 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 order form, 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.
back to top
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 in
the United States, for less than $1000.00 you can set up a
"shell company" in Delaware. But realistically, this
kind of company will most likely not suit all of your needs.
Generally the basic costs to form a corporation depend on
your authorized capital, which means that a $100,000.00
corporation is less expensive to form than a $10,000,000.00
corporation. The applicable fees are directly related to the
amount of authorized stock capital.
(We will gladly 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 means cash; e.g. 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 many sources which will provide
anyone with that kind of information. Honesty and hard work
will always get you a lot further than pretense. So please
don't be distracted by false advertising.
One more remark regarding the Delaware corporation:
Delaware used to be a very popular state in which 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; therefore, Delaware is no longer
our first choice.
We offer two other 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.
back to top
How will my tax situation be affected?
Generally, all income generated in the United States is
subject to US taxation. The highest tax rate in the United
States is only approximately 39 percent. In Germany, this
amount could be much higher (up to 53 percent).
Example: If a US corporation generates net profits up to
$50 000, the tax rate will be 15 percent. Profits up to $75
000 carry a tax rate of 25 percent, up to $100 000 a rate of
34 percent, and profits in excess of $335 000 will be subject
to a 39 percent tax rate.
The business activities of a corporation registered in the
United States are not limited to its geographical boundaries
but 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" with any
of your other companies — for example in Germany — and the
costs can be billed to the German company. The absolute
requirement for such transactions is that your US corporation
is actually active and its existence can be proved. 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 will
be listed in the local directory, you will receive your mail
punctually, you will 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.
If you have specific questions which are not answered above,
please feel free to send them to us, we will respond quickly.
back to top
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
|
