Corporations

“Contact Douglass & Runger For Your Incorporation Needs”

Memphis Incorporation Lawyer

A corporation is a type of business entity that an entrepreneur may elect to pursue when forming a new business entity.  Specifically, a corporation is one of the more popular business entities that business owners choose due to the various protections it affords its owners.

Notwithstanding, the popularity of the corporate business entity does not necessarily mean that they are easy entities to form and operate.  As such, the assistance of a Tennessee incorporation lawyer can assist business owners in tackling the many legal issues that arise during the incorporation of a new business. If you are seeking to form a corporation, it is critical that you contact the Tennessee incorporation law firm of Douglass & Runger, Attorneys at Law, to learn more about your legal options.

Benefits and Drawbacks of Incorporation

One of primary benefits of a corporation is the protection it offers to the owners of the corporation: its shareholders. In general, a shareholder is not personally responsible for the debts or liabilities of the corporation. Thus, even if the corporation must eventually dissolve and wind up its affairs due to financial constraints, the shareholders themselves will generally retain no liability for paying any of the corporation’s outstanding debts.

Those considering incorporating must also appreciate the tax disadvantages of this form of business entity. In general, a corporation’s profits are subject to “double taxation” in that they are initially taxed when the corporation receives them (the corporation pays an income tax on its profits) and, if these profits are shared with the shareholders in the form of a dividend, the shareholder must pay taxes on the dividend on its income tax return.

Issues Surrounding Incorporation and Corporate Operations

When you decide to begin a new corporation, there are a host of legal issues that must be handled at the outset. From making the appropriate filings with the Secretary of State to the process of novation, an experienced incorporation attorney can help make the process of getting a corporation up and running easier:

Filings with the Secretary of State

An incorporator must file certain documents with the Secretary of State in order to have his or her corporation properly registered. One of the most basic documents required is a charter of incorporation and articles of incorporation. These documents inform the individuals who examine them as to the nature of the business’s operations and how the business is to be run.

Authorization of the Issuance of Shares

The foundational documents for the corporation will indicate how many shares will be authorized and the types to be issued when the business is initially formed. Each share represents an ownership interest in the corporation.

First Meeting of the Shareholders

Soon after a business is incorporated, the shareholders will hold their first meeting in order to elect directors and other high-level managers for the corporation. This is a critically important meeting, as these directors will be responsible for the oversight and operation of the business and for designating managers to run its day-to-day affairs.

Novation

Novation refers to the process whereby a corporation adopts and assumes responsibility for contracts and obligations that were entered into prior to and for the purpose of its incorporation. In novation, the corporation relieves the individual person of legal responsibility for paying back these obligations.

Annual Reports

Each year, the Tennessee Secretary of State requires corporations to file an annual report detailing certain aspects about the corporation’s activities during the preceding year. If these reports are not made in a timely manner, the Secretary of State may take certain legal actions against the corporation.

Contact a Seasoned Memphis Incorporation Lawyer Today to Learn More

Although many individuals enjoy the benefits associated with operating a corporation, forming a corporation involves many steps that if not taken, can result in legal trouble. Douglass & Runger, Attorneys at Law, is a Memphis-area law firm able to assist you in completing the necessary steps to incorporate and in getting your new corporation up and running. Contact us today by calling (901) 388-5805 to obtain the help you need to start your business.