How Do I Know if a Company Is a Corporation?
If you need to know if a company is a corporation, there are a few indicators and you'll need to start with a basic search for the company's official name.3 min read
How do I know if a company is a corporation? If you need to know if a company is a corporation, there are a few indicators. Start with a basic search for the company's official name. Names of corporations must end with either the identifier "Incorporated" or "Corp." If one of these identifiers is present, then the company is most likely a corporation.
Other Ways to Determine if a Business is a Corporation
There are a few other ways to find out if a business is a corporation, including:
- Talk to the manager or owner to find out if the business has a board of directors or was formed by the filing of articles of incorporation. These are both indicators that a business is a corporation.
- Use your state's corporations registry to look it up. It's common for states to maintain records that list all corporations residing within their borders.
- Visit your state's business division office or website.
The business division in your state can tell you if a business is or isn't a corporation, and when it was originally formed if it is a corporation.
What a Corporation Is
A corporation is a legal entity, and it has the same set of responsibilities and rights that an individual has. A corporation has to pay tax on income that is earned, and it's able to enter into a contract. It can file a lawsuit, and it can be sued by someone else. All actions of a corporation must come through a board of directors, and every corporation has to have a board of directors. As a business entity, a corporation leads a separate existence from that of its owner or owners.
Ownership of a Corporation
The people who own a corporation are called shareholders. The amount of the business each shareholder owns is represented in the form of shares, called corporate stocks. Shareholders have the option of choosing a board of directors to handle the operations of the business. Or, if they prefer, they can form a shareholders agreement that allows them handle the business operations. A corporation is more complicated to form and run than an unincorporated business.
If you own shares in a corporation, the taxes for the corporation need to be filed separately, not as part of your personal taxes. Most states do not hold shareholders responsible on a personal level for corporate debt. There are two different types of tax treatments for corporations.
The Difference Between C Corp and S Corp Taxation
The types are the treatment for a C corporation or an S corporation. C-corporation taxation means the business gets taxed using the corporate income tax rate. Then when shareholders receive dividends from the corporation, those dividends are also taxed a second time as individual income for the shareholders. When the corporation is taxed as an S corporation, and it elects to be taxed as an S corporation by the Internal Revenue Service (IRS), only income that's earned passively and the amount of profit that gets distributed to shareholders will be further taxed.
A company is described as an entity that performs a business activity. It can be a corporation, a partnership, or a sole proprietorship. Choosing the business structure is one of the first things to do when starting a business, and it's one of the most important steps to do when you're getting ready to start your business.
To make a wise choice about your business structure, it helps to know how each of the three business structures works and the advantages and disadvantages of each. Seeking the advice of an attorney is usually your best approach when choosing your business structure.
Some other ways to search for a business entity's status as a corporation or company include searching by the owner's name using the "last name, first name, middle initial" format. If you're searching online, it isn't usually necessary to have the full name. Most company records are also indexed with states in alphabetical order to simplify searching.
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