Corporations

What Is a Corporation?

A corporation is a business entity that exists as a separate legal "person" from its owners. When you incorporate your business, you create a distinct entity that can own property, enter contracts, and be held liable for its own debts. That separation is what protects your personal assets from business liabilities — a concept known as the "corporate veil."

Corporations come in different flavors. An S-Corp is popular with small businesses because it allows profits to pass through to the shareholders' personal tax returns, avoiding double taxation. A C-Corp is more common for businesses that plan to raise outside investment or have more complex ownership structures. Both types are governed by bylaws and managed by a board of directors.

The Formation Process

Forming a corporation in Missouri involves filing articles of incorporation with the Secretary of State, designating a registered agent, obtaining an EIN from the IRS, and drafting bylaws that spell out how the company will be governed. You'll also want to hold an initial board meeting to appoint officers and adopt key policies.

If you plan to use a different name than your legal corporate name, you'll need to file a DBA as well. And if you're doing business in states beyond Missouri, you may need to register as a foreign corporation and maintain a certificate of good standing in each state.

Corporations vs. LLCs

Both corporations and LLCs offer liability protection, but they differ in formality and flexibility. Corporations require more ongoing compliance — things like board meetings, corporate minutes, and annual report filings in some states. LLCs, by contrast, are governed by an operating agreement and have fewer structural requirements.

The tradeoff is that corporations offer a more established structure that's well-recognized by investors, lenders, and potential acquirers. If you're planning to raise capital, issue stock, or eventually sell your business, a corporate structure may be the right fit.

Corporations and Estate Planning

If you're a business owner with an estate plan, your corporate ownership needs to be coordinated with your trust or will. A buy-sell agreement is essential for multi-shareholder corporations — it establishes what happens to a shareholder's interest if they die, become incapacitated, or want to exit the business. Without one, your family and co-owners could face a messy and expensive dissolution process.

How The Taormina Firm Helps

Vince helps you figure out whether a corporation is the right move for your business and, if so, which type makes the most sense. He handles the formation documents, drafts your bylaws, and makes sure you understand the ongoing requirements. The Taormina Firm also offers a Startup Success package that includes everything you need to launch your corporation on solid legal footing — from formation to governance to protecting your intellectual property and trade secrets.