Overview of Domestic Profit Corporations
A Domestic Profit Corporation is a business structure that aims to generate profits for its shareholders. As a legal entity, a corporation has rights, privileges, and liabilities beyond an individual. Doing business as a corporation may yield tax or financial benefits, offset by considerations like increased fees or less control.
Foreign Corporations and Tax Implications
A company founded in one state but operating in another is a foreign corporation. Companies often choose Delaware for preferable corporate laws. One key perk is liability protection, shielding shareholders from debts and lawsuits.
Key Considerations for Corporation Type
To become an S corporation, you must change your tax year to end December 31. Call the IRS to see if your company is a C corporation, S corporation, partnership, LLC, or sole proprietor based on income tax returns. Consult an attorney on implications of your choice of entity.
Taxation and Corporate Benefits
A domestic limited liability company (LLC) operates in its formation state. It combines corporate and partnership benefits for small businesses.
Examples of Domestic Corporations
Examples of domestic corporations include Alphabet, Google’s parent company. It incorporated in Delaware but is listed in California as a foreign corporation. Profit corporations formed in Michigan under the Business Corporation Act can be created for any lawful purpose. When articles are filed, the corporation’s existence begins.