Is An S-Corporation Right for Your Startup?

Is An S-Corporation Right for Your Startup?

Business Formation, Corporations, Entity Formation, Equity Incentives, Foreign Corporation, Start-Up
In my Phoenix emerging business law practice, I’m regularly asked to incorporate a client’s startup company. However, I’m often met with a founder's blank stare or “Um…” when I ask them if they wish to be considered a C or an S-corporation. Let me remind the reader that I am not a CPA or tax attorney and that you should always (and I mean always!) discuss your and your co-founders' specific tax situation and business and capital raise goals with your CPA or tax advisor before making a Subchapter S election for your startup. Aren't all corporations just...well, corporations? Not exactly. When you incorporate your startup company, for Federal taxation purposes anyway your new corporation will be treated by default as what is known as a "C" corporation (based on…
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Do I Need to Register My Out-of-State Corporation in Arizona?

Do I Need to Register My Out-of-State Corporation in Arizona?

Business Formation, Corporations, Entity Formation, Foreign Corporation
If you're an Arizona startup that is actually incorporated in another state (e.g., Delaware), chances are by now you've heard that you may have to register to do business here in the State, even though you are already incorporated in a different state. In this post, we examine whether and when you must register your out-of-state corporation in Arizona. Operating in Arizona but incorporated elsewhere? This question is far more common than it might seem in our Phoenix startup law practice. For example, earlier this month I met with representatives of a middleware outfit that had originally formed as a corporation in a state back East. However, their U.S., Canada, and Mexico operations had just recently relocated to the metro Phoenix area. During our meeting, I asked if they had…
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