As long as you work for your corporation, even in a part-time or consulting capacity, you can take home profits in the form of a salary and bonuses, avoiding double taxation. For more information, see How Corporations Are Taxed . A professional corporation is a special kind of corporation that only members of certain professions, such as lawyers, doctors and other healthcare workers, can create. By forming a professional corporation, professionals can limit their personal liability for the malpractice of their associates. Securities laws are meant to protect investors from unscrupulous business owners.
Registration takes time and typically involves extra legal and accounting fees.
Fortunately, many small corporations get to skip the registration process because of exemptions provided by both federal and state laws. Most states have enacted their own versions of this popular federal exemption. If you and a few associates are setting up a corporation that you'll actively manage, you will no doubt qualify for an exemption, and you will not have to file any paperwork. For more information about federal exemptions, visit the SEC website . This fact-packed eGuide will set you straight on the path to the best structure for your business.