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                        Four Myths About Incorporation
Steven Lemon
6 Dec 2012

I guess maybe I shouldn't call them MYTHS because most of them are true, but the reasoning behind them is mostly false or misleading.

When asked, the four answers given most for NOT incorporating are:

Myth #1. Corporations are double taxed

While it is true that a corporation pays taxes on it's income, then again on dividends, There is no requirement to pay dividends and your salary is a business deduction, so no corporate taxes are paid on that.. There are so many loopholes in corporate tax law that you generally must be very successful (minimum $25000 net income) before you pay any tax at all. Some companies, GE for example, earn BILLIONS in profit and pay no taxes at all. This is possible only with a corporation.

Myth #2. Corporations Are expensive to start and operate

That is mainly because many owners spend money they don't have to. They may pay hundreds or even thousands of dollars for a REGISTERED AGENT when they can be their own registered agent for nothing. They spend money on fancy corporate books, stock certificates and documents that they don't need.

I started my corporation back in 1995 for less than $100. Total administrative expenses since then (20 years) have amounted to less than $1000. I not only have been my own registered agent for all that time but at times acted as agent for other corporations.

While Delaware used to be the mecca for incorporating, there are several states not that are cheaper and almost all states are similar in the incorporating process. Whether you incorporate in Alaska today for $45 or Pennsylvania for $425. Everybody else is somewhere in between. Each state has it's own rules but I have found that except for a few weird places (South Carolina requires the signature of a LAW
YER) they are pretty much in step. Some require publication in the newspaper and some do not. The real differences are the prices of the process

Myth #3. See Corporations-Pg2

Barack Obama

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