Profit Corporation

Incorporate your Profit Corporation , with Getting Incorporated™'s Profit Corporation service. Incorporating your Profit Corporation protects your personal assets by limiting your personal liability in business affairs, and can also be used to separate business assets from each other. Filing an S Corporation Election with your Profit Corporation also allows for pass-through taxation to avoid double taxation. Getting Incorporated™ can incorporate your business as a Profit Corporation in the state of your choice.

Business Law Update:

West Virginia

HB 4587/SB 680

A BILL to repeal §11-23-5b of the Code of West Virginia, 1931, as amended; to amend and reenact §11-13S-4 of said code; to amend and reenact §11-23-5a of said code; to amend said code by adding thereto a new section, designated §11-23-17b; to amend and reenact §11-24-3a, §11-24-4, §11-24-7, §11-24-7b, §11-24-13a, §11-24-13c, §11-24-13d, §11-24-13f and §11-24-42 of said code; and to amend said code by adding thereto a new section, designated §11-24-3b, all relating to corporate net income tax and business franchise tax and combined reporting; specifying percentage of taxes subject to offset by manufacturing investment tax credit; specifying allocation and apportionment methods and rules; specifying application of certain tax credits; defining terms; specifying general meaning relating to the term tax haven; specifying imposition of tax and rates; specifying reductions of corporation net income tax rate; specifying nullity for designated provisions; specifying removal of nullity for designated provisions; specifying apportionment rules for financial organizations; specifying treatment of insurance companies; specifying method of filing; specifying application of designated net operating losses; specifying treatment of designated dividends; mandating reporting on water's-edge unitary basis; specifying election to report based on worldwide unitary basis; specifying authority of Tax Commissioner to prescribe reporting basis; and specifying effective dates. Current Bill Status: February 15, 2008 referred to Finance Committee.

Start Up Tip:

Reasonable Compensation in an S Corp

S-Corporation's which file their 1120S with $0.00 showing on Line 7 "Compensation of Officers" are increasing their risk of IRS audit. The IRS takes the position that no one works for free, and has said repeatedly that officers must be paid reasonable wages for the work they perform. Owner-employees of S-Corporation must receive a reasonable payroll taxable salary for their duties, even if the business is losing money. The upside is that in loss years S-Corps can deduct their officer pay to maximize the loss, and in profitable years gains are maximized as money Owner/Employees make above and beyond the reasonable salary can be taken out without a payroll tax liability, while the salary itself is a deductible expense.

[Profit Corporation]

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