DBI 5 Minute Incorporation Tutorial

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DBI – 5 Minute Incorporation Tutorial Delaware Business Incorporators, Inc. Do you have 5 minutes? This tutorial will teach you how to incorporate a business or form an LLC in Delaware. www.dbiglobal.com

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DBI – 5 Minute Incorporation Tutorial Delaware Business Incorporators, Inc. Please Pause viewer to read disclaimer. Disclaimer: This presentation is intended to provide general information about how to incorporate in Delaware and is intended for informational purposes only. It is not intended to replace the advice of an attorney or tax accountant and does not constitute individualized legal advice, legal service, or tax advice. No representations or warranties, express or implied, are given regarding the legal, tax or other consequences resulting from the use of our services, including but not limited to information and/or forms. The information supplied by DBI is supplied only with the understanding that DBI and its employees, agents and/or representatives are not engaged in rendering legal services, legal advice, or tax advice. DBI expressly disclaims any liability, loss or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this information.

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DBI – 5 Minute Incorporation Tutorial Delaware Business Incorporators, Inc. Let’s start by discussing the reasons attorneys and CPAs often advise their clients to incorporate instead of doing business as a sole proprietor.

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The primary reason business owners choose to incorporate or form an LLC is to limit the liability they would face in the event of a lawsuit or bankruptcy. DBI – 5 Minute Incorporation Tutorial Incorporation vs Sole Proprietorship Delaware Business Incorporators, Inc.

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So long as the owner does not personally guarantee the debts of the company (or commit fraud) the owner's losses are limited to his or her investment in the company. DBI – 5 Minute Incorporation Tutorial Incorporation vs Sole Proprietorship Delaware Business Incorporators, Inc.

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So unless you put them up as collateral, your house, personal savings account, personal retirement accounts and other assets would not be seized to pay a debt of the company or a judgment against the company. DBI – 5 Minute Incorporation Tutorial Incorporation vs Sole Proprietorship Delaware Business Incorporators, Inc.

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The second most common reason to Incorporate or form an LLC is to raise capital by selling shares to investors. DBI – 5 Minute Incorporation Tutorial Incorporation vs Sole Proprietorship Delaware Business Incorporators, Inc.

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DBI – 5 Minute Incorporation Tutorial Delaware Business Incorporators, Inc. Have you been wondering why more than half of the Fortune 500 have chosen Delaware as the home of their corporate charter?

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DBI – 5 Minute Incorporation Tutorial Delaware Business Incorporators, Inc. There are so many reasons to incorporate in Delaware, an entire section of our website is devoted to this topic. We’ll review just a few…

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Anonymity Delaware Corporations and LLCs can be formed without naming the initial members, directors or shareholders (owners). DBI – 5 Minute Incorporation Tutorial Reasons to Incorporate in Delaware Delaware Business Incorporators, Inc.

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Director Shield Law A Delaware director shield law permits Delaware Corporations to shelter their directors from personal liability. DBI – 5 Minute Incorporation Tutorial Reasons to Incorporate in Delaware Delaware Business Incorporators, Inc.

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Favorable Tax Climate No State Sales Tax DBI – 5 Minute Incorporation Tutorial Reasons to Incorporate in Delaware Delaware Business Incorporators, Inc.

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Favorable Tax Climate No Delaware Corporate Income Tax for companies operating outside of Delaware. DBI – 5 Minute Incorporation Tutorial Reasons to Incorporate in Delaware Delaware Business Incorporators, Inc.

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Favorable Tax Climate No Delaware Corporate Income Tax on companies whose sole activities in Delaware are related to intangible investments. DBI – 5 Minute Incorporation Tutorial Reasons to Incorporate in Delaware Delaware Business Incorporators, Inc.

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Pro-Business LegislationDelaware remains unique in the degree of latitude it affords Corporations and Limited Liability Companies in organizing and operating their business. DBI – 5 Minute Incorporation Tutorial Reasons to Incorporate in Delaware Delaware Business Incorporators, Inc.

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DBI – 5 Minute Incorporation Tutorial Delaware Business Incorporators, Inc. I bet you’re wondering, “How can I form a Delaware company if I don’t have an office in Delaware?”

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Delaware law only requires you to have a Registered Agent in Delaware to form a Delaware Corporation or LLC. DBI will be your Delaware Registered Agent. DBI – 5 Minute Incorporation Tutorial Delaware Registered Agent Delaware Business Incorporators, Inc.

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A Delaware Corporation or LLC has the constitutional right to transact Interstate Business. “Interstate” means involving parties in two or more states. DBI – 5 Minute Incorporation Tutorial Delaware, The US, and Abroad Delaware Business Incorporators, Inc.

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A Delaware Corporation or LLC can also be used to transact business outside the US, whether or not you have a base of operations inside the US. DBI – 5 Minute Incorporation Tutorial Delaware, The US, and Abroad Delaware Business Incorporators, Inc.

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Your Delaware Corporation or LLC can also be registered to transact Intrastate Business in additional states; without the need of incorporating in each state. DBI – 5 Minute Incorporation Tutorial Delaware, The US, and Abroad Delaware Business Incorporators, Inc.

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DBI – 5 Minute Incorporation Tutorial Delaware Business Incorporators, Inc. Ok, let’s talk about Corporations and Limited Liability Companies (LLCs). We’ll start by comparing the two.

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SimilaritiesLimited Liability Companies and Corporations have much in common. Both provide similar limited liability to the owners/investors. DBI – 5 Minute Incorporation Tutorial LLC or “Inc” ? Delaware Business Incorporators, Inc.

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SimilaritiesSimilar tax treatment options, including the “Pass Through” option and the “C-Corporation” option, are available to both Corporations and LLCs. DBI – 5 Minute Incorporation Tutorial LLC or “Inc” ? Delaware Business Incorporators, Inc.

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DifferencesTwo significant differences between a Delaware Corporation and a Delaware LLC: DBI – 5 Minute Incorporation Tutorial LLC or “Inc” ? Delaware Business Incorporators, Inc.

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DifferencesCorporations issue “stock certificates” which can be traded privately or on a public stock exchange. DBI – 5 Minute Incorporation Tutorial LLC or “Inc” ? Delaware Business Incorporators, Inc.

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DifferencesLLC’s can raise money from investors by privately selling investment shares, but LLC’s cannot be publically traded on a stock exchange. DBI – 5 Minute Incorporation Tutorial LLC or “Inc” ? Delaware Business Incorporators, Inc.

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DifferencesBoth Delaware Corporations and Delaware LLCs can be formed anonymously, without disclosing the names of the shareholders/owners, directors or officers… DBI – 5 Minute Incorporation Tutorial LLC or “Inc” ? Delaware Business Incorporators, Inc.

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Differences…But, Delaware Corporations are required to file an annual report naming one officer and all directors. Note: a Delaware corporation is not required to name owners (shareholders) on the annual report. DBI – 5 Minute Incorporation Tutorial LLC or “Inc” ? Delaware Business Incorporators, Inc.

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DifferencesDelaware LLCs are not required to file an Annual Report. DBI – 5 Minute Incorporation Tutorial LLC or “Inc” ? Delaware Business Incorporators, Inc.

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Entity Tax Delaware Corporations authorizing 5,000 shares or less will pay a minimum Franchise Tax of $125 when they file their annual report. DBI – 5 Minute Incorporation Tutorial LLC or “Inc” ? Delaware Business Incorporators, Inc.

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Entity Tax Delaware LLCs will pay a flat LLC Tax of $250 each year. DBI – 5 Minute Incorporation Tutorial LLC or “Inc” ? Delaware Business Incorporators, Inc.

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DBI – 5 Minute Incorporation Tutorial LLC or “Inc” ? Let’s Review: Delaware Business Incorporators, Inc.

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DBI – 5 Minute Incorporation Tutorial Delaware Business Incorporators, Inc. We’re almost done with the tour; I just want to show you what a Corporate Kit is before you go.

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DBI – 5 Minute Incorporation Tutorial At a minimum a Corporate Kit or Operating Agreement kit should contain model By-Laws and Minutes or a model Operating Agreement. Delaware Business Incorporators, Inc.

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DBI – 5 Minute Incorporation Tutorial These are the documents which define the rules for profit distributions, resignation or expulsion of members or directors, shareholder rights and other important matters… Delaware Business Incorporators, Inc.

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DBI – 5 Minute Incorporation Tutorial …Matters which could be essential in resolving disputes between principals or defending tax status in an IRS inquiry. Delaware Business Incorporators, Inc.

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DBI – 5 Minute Incorporation Tutorial The Delaware Division of Corporations never registers the names of the owners of a Corporation or LLC. Delaware Business Incorporators, Inc.

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DBI – 5 Minute Incorporation Tutorial Our Corporate kits and Operating Agreement kits include share certificates and transfer ledgers to ensure that your ownership of the company is properly documented. Delaware Business Incorporators, Inc.

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DBI – 5 Minute Incorporation Tutorial www.dbiglobal.com Delaware Business Incorporators, Inc. Well, that’s the end of the tutorial; thank you for joining me. If you’re ready to learn more, visit our website to see the Learning Center tab or browse our New Company Registration Packages.