Incorporating Provides Liability Protection For Shareholders
In the United States, businesses register as legal entities (sole proprietors, partnerships, or corporations).
You do not have to incorporate and may wish to set up your business based on one of the following models listed on http://www.usa.gov:
- A sole proprietorship is a business entity that legally has no separate existence from its owner, does not pay corporate taxes, and has the least amount of government regulation.
However, the assets of the owner are at risk if the business is involved in a lawsuit or goes into default.
- A partnership (general, limited, and limited liability partnership) is a business entity formed by two or more individuals.
A general partnership is similar to a sole proprietorship, while a limited or limited liability partnership offers a degree of protection of the partners' personal assets and business liabilities.
- A corporation is a business entity that is separate from its owners and is by law a separate and 'fictitious' person. Its owners are shareholders, meaning they own a certain percentage of the company through a share or stock.
- A limited liability company (LLC) is a business entity offering limited liability to its owners. It is similar to a corporation and is suitable for smaller companies with a limited number of owners.
The main advantage of a corporation is the liability protection it provides its shareholders, which is liable for its own debts and is liable to the extent of the corporation's assets.
The assets of a shareholder are personal assets that are not accessible by corporate creditors in most circumstances.
To form a corporation, file with the state: The articles of incorporation.
A corporation can incorporate in any state, and it does not have to incorporate in the state in which it is going to do business.
A corporation must also register with the Internal Revenue Service (IRS). Lawyers and accountants can assist in the legalities and documentation needed to form a corporation.
About Victory State Bank:
VSB Bancorp, Inc. (NASDAQ: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank. For additional information, Victory State Bank may be reached at 718-979-1100 or visited online http://www.victorystatebank.com .
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