FAQ
General Incorporation Questions
- What is Incorporation?
- What is Corporate Formation?
- What do I need to know before I incorporate?
- What state should I incorporate in?
- What is a Corporation?
- What is an LLC?
- How does an S-Corporation differ from a C-Corporation?
- What is double taxation and how to I avoid paying it?
- What is a Resident Agent and do I need one to incorporate?
- Can a Corporation or LLC have only one owner?
- Aside from Incorporation, are there other legal requirements I need to abide by before I transact business?
- Do I need to incorporate my business?
- Can I change the entity of my business at some later date after I incorporate?
- What is an EIN and do I need one to incorporate?
Specifics about Incorporating
- What should I name my corporation?
- What if my company doesn't have an address yet?
- What is a Board of Directors?
- What are Corporate Shareholders?
- What are LLC Members?
- Do the Board of Directors and the Shareholders have to be different people?
- What are Articles of Incorporation (AOI)?
- What are Articles of Organization?
- What are Corporate Formalities?
- What is an organizational meeting?
Business Credit
- Why do I need to keep my business and personal credit separate?
- Can I build all of my credit without Personal Guarantees?
- How can I start building my business credit?
- What happens when Lenders check my D&B Report?
- What types of credit can I establish?
Grants
- What types of grants are available for my business?
- Where do my credit scores need to be?
- Is there a limit on the number of grants I can apply for?
- Is there a limit on the grant money I can receive?
- Why does NGF charge for free grants?
Personal Credit
- What makes NGF the Nation's leading Credit Repair Company?
- Is it legal?
- Can I repair my own credit?
- How does the process work?
- Should I pay my collections?
- How do I handle Collection Agencies when they call?
- How long does the process take?
- How do I strengthen my credit through the adding of positive credit?
- Why doesn't NGF advocate other sources for the addition of positive credit?
- What if I don't have a computer or internet access?
General Incorporation Questions
Incorporation is the process of preparing certain documents, including a document referred to as the "Articles of Incorporation," and the filing of the document with the Secretary of State. If forming an LLC, the document used is referred to as the "Articles of Organization."
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It's a synonym for "Incorporation." It's the process by which a corporation or LLC becomes officially incorporated.
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Before you incorporate, you need several pieces of information. You need to know where you would like to incorporate (which state), your choice of corporate entity (C-Corp, LLC, Series LLC, etc.), an official name for your company, the company's address, and the name and address of your company's resident agent.
For a Corporation, you will need to decide how many shares the corporation is authorized to issue. For an LLC, you will need to choose the type of management (manager-managed or member-managed).
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You will need to choose what state to incorporate in. This is a very important decision because it will be the company's legal home. However, the legal home doesn't have to be the company's physical home. A company can operate and carry on all of its business in a state other than the state of its incorporation. However, it usually boils down to incorporating in the state of its operation,
Delaware
or
Nevada
; and typically it is simply
Delaware
or
Nevada
.
From here, the traditional choice is
Delaware
for Fortune 500 companies and
Nevada
for small businesses, investors, individuals looking for tax benefits and asset protection, etc.
See our "Why Incorporate in
Nevada
" page for further details.
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A corporation is an entity that is separate from the owners of the business. To become a corporation, you must incorporate with the state. Corporations are the traditional entity, created for large businesses and have much less flexibility for uses such as investments, small businesses, single-person companies, etc.
See our "Education" page for further details.
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An LLC (Limited Liability Company) is similar to a corporation in that it is separate from the owners of the business and is entitled to limited liability. An LLC is favorable in some instances because it entitles the owners to limited liability, plus it has less stringent corporate formalities, management flexibility and relaxed ownership qualifications.
LLC's are today's entity of choice as they are better equipped for the common uses of entities today as opposed to the traditional uses of yesterday.
See our "Education" page for further details.
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The difference is quite simple; there is no such thing as an S-Corporation.
The Secretary of State has no legal entity called an S-Corporation as it is a term created by industry professionals to refer to an IRS filing called a Sub-Chapter S.
An "S-Corporation" is quite simply a C-Corporation in which at the end of the year you file the corporate taxes using the 2553 form (Sub-Chapter S) instead of the traditional 8832 form (corporate tax structure).
Either way, the entity is still a C-Corporation and is subject to the same rules and regulations of operation as normal.
See our "Education" page for further details.
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Double taxation is the concept of a corporation paying two sets of taxes because its profits are taxed once at the corporate level and then taxed again at the individual level when the distributions are made.
This can be avoided in two ways.
First, you can file taxes using pass-through taxation (Sub-Chapter S form 2553).
Second, you can maximize your company's expenses (thus lowering your taxable income) and lower your personal salary (thus minimizing your personal taxes).
This second option is ideal; please contact one of our expert representatives for more detailed information.
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To incorporate in any state, you must appoint a registered agent. This person is designated by the corporation to receive important legal documents on behalf of the corporation. This agent must be a resident of the state of incorporation. To incorporate in
Nevada
, you must have a registered agent in
Nevada
. This agent must also have a physical address - in other words, they may not use a P.O. Box address.
All of our formation programs already include 12 months of this service.
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Yes. In fact,
Nevada
is one of several states to allow a single owner and
Nevada
is known as one of the friendliest states for this type of practice.
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EIN - Employer Identification Number:
Before your company transacts business, it will need an employer identification number (EIN) from the IRS. Our firm already includes this service in all of our formation programs.
License Requirement:
Before transacting business, some states require you to obtain a license and possibly pay a state fee. Additionally, the city in which you transact business may require you to obtain a license and pay a city licensing fee.
Our firm includes all necessary contact information, for these requirements, in all of our formation programs.
Corporate Formalities:
Corporations and LLCs are required to abide by certain corporate formalities. See below for such formalities.
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Ultimately, it is your decision to incorporate your business. We may give you our opinion as to whether it is best to incorporate, and the advantages and disadvantages of incorporating. However, the ultimate decision is yours.
One of the most important reasons to incorporate is to shield you from personal liability. If you are not incorporated, creditors may sue you personally and reach your personal assets (i.e., personal residence, bank accounts, etc.). Generally, if you incorporate, creditors are unable to reach these assets.
There are also other reasons on why you should incorporate: personal image, perpetual existence of the corporation, and tax advantages.
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The short answer is YES. If you have an LLC, you may incorporate into a C-Corporation and vice versa. However, there are certain requirements that must be fulfilled - i.e., shareholder approval, state fees, etc.
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Every new Corporation or LLC needs an Employer Identification Number. An EIN number is similar to a Social Security Number if you were to transact business as an individual. You don't need one to incorporate, but you must obtain one after incorporating. All of our formation programs already include this service.
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Specifics about Incorporating
The name of your corporation can be as wild as your imagination. The only requirement is that it must be distinguishable from other corporations. Prior to filing the articles of incorporation, we do a preliminary name check to see whether your name is already taken.
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The official company address must be a physical address - not a PO Box. However, if you have not already rented office space, you may set your address as your home address.
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They are the decision making authority of the corporation. They delegate authority to the officers of the corporation, but maintain power to oversee the operation of the corporation. Directors are usually appointed by shareholders.
There is no requirement that directors, officers and shareholders be different people. Shareholders can be directors and officers. In small corporations, the shareholders are usually the directors and officers.
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Shareholders are considered the owners of the company. The Directors and Officers work to better serve the shareholders. Although the corporation is liable for the debts of the corporation, shareholders have limited liability - it is limited to the amount they invest in the corporation.
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A "member" is an owner of an LLC (Limited Liability Company), much like a corporation's shareholder.
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No. They are often the same in smaller corporations.
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Articles of Incorporation are the main documents used to incorporate. These articles are filed with the secretary of state.
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Articles of Organization are the main documents used to form an LLC. These articles are filed with the secretary of state.
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To continue recognition as a corporation or LLC, the corporation/LLC is required to abide by certain "corporate formalities" and to keep accurate records of its activities. There are three distinct corporate formality requirements: Corporate Records Requirement, the Annual Reporting Requirement, and the Meeting Requirement.
Corporate Records Requirement:
The corporate records requirement compels Corporations and LLCs to maintain certain corporate records at its principal office. These records include the Articles of Incorporation, the Corporate Bylaws (Operating Agreement), Minutes of shareholder and director meetings, written communications b/t shareholders and the corporation for the past three years, the corporations stock transfer ledger, names and address of shareholders, directors and officers, most recent annual report, and financial records for the past three years.
Annual Reporting Requirement:
Corporations and LLCs must file a statement and pay a moderate fee on an annual or biennial basis. This filing requirement, which is generally referred to as an "Annual Report" or "Franchise Tax," updates the state government as to the status of the company, and permits the company to continue in existence.
Meetings Requirement:
Once the corporation is formed, the organizational meeting is the official meeting that must be held after incorporating. There are two types of meetings that a company must hold on a continuing basis. The corporate shareholders (or LLC members) are entitled to at least an annual shareholder meeting and the board of directors (or LLC board of managers) is required to hold periodic meetings throughout the year.
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Once the Articles have been filed, and the business is officially formed, the company should hold an organizational meeting. All directors, officers and shareholders should be attending. At this meeting, those attending lay the foundation of the company's operation. It's a synonym for "Incorporation." It's the process by which a corporation or LLC becomes officially incorporated.
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Business Credit
Using personal credit for one's business is risky. Here are two main reasons. 1. Individual business owners or officers of a corporation might end up lowering their personal credit rating. This rating is based upon a number of factors including available credit, amount of debt and payment history. 2. If the business defaults on its loans, the individuals who originally signed to secure the loan are held personally liable.
National Growth Funding can show you how to keep your personal credit intact.
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Even if you are a start-up company, National Growth Funding can help separate your personal credit from your business credit, but building business credit takes time.
Older, mature businesses have more credit options than new start-up businesses, but this doesn't mean that it's impossible for a new business to obtain business credit without personal guarantees. This is where National Growth Funding can be invaluable as we guide you through the steps needed to establish your business credit and to make good use of small business loans.
And here's the good news. Whereas it normally takes from three to four years to build business credit, we can help you accomplish this goal in ONLY 6 to 9 months!!
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The foundation of business credit is vendors with whom you have established good credit. This may include business lines of credit, business credit cards and other types of small business loans. Ideally, your business should have business credit accounts with at least five different vendors who will report favorably about your business to Dun & Bradstreet (D&B), one of the most respected business credit reporting agencies in the United States. By doing so, these vendors are effectively building your business credit.
National Growth Funding's Business Credit Builder Program can help you get these much needed trade references reported from vendors to D&B.
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The first thing most lenders will look for on your D&B report will be your Paydex score, which is a numerical value from 1 to 100, representing your business's credit standing. This Paydex score depends upon your trade references' reports. The higher the score, the better. Generally speaking, you want to aim for a score of 75 or more.
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The type of credit we can get for your business largely depends upon your needs, but here are some typical examples to give you an idea about the range of possible credit: business credit cards such as Platinum, gasoline or even department store credit cards; single auto or small fleet leases; business lines of credit for expenses such as printing, advertising or technology. In short, we can help you with almost any kind of small business financing and small business loans. Our business is to help you establish business credit
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Grants
The two main types of grants your business can apply for are Federal Grants and Corporate Grants. Federal Grants are the monies designated by the Federal Government to be distributed to the public for the purpose of stimulating economic growth through the success of small business. Corporate Grants are a similar idea however they are given out by Large Corporations or Organizations. The idea behind this is that the Corporations receive tax breaks on the money given out and the Federal Government is aided in their efforts.
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By definition, grants are monies given out with no obligation to be repaid. This means no credit checks or collateral or co-signers. Even if you just finished filing for Bankruptcy, you are able to receive grant money..
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Absolutely not. You can apply for as many grants in as many categories as you would like.
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You can receive as much or as little as you need. As long as your business can legitimately request the amount, you can possibly be funded. Of course, this means a Lawn Mowing Service will probably not qualify for $10 million.
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National Growth Funding never charges for grant money. However, as any For-Profit Business does, NGF charges for the time, information and service involved with researching and writing grants. It is similar to fixing your car, you can do it yourself but if you are not aware of exactly how the industry or application process works you will never get anywhere.
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Personal Credit
We are utilizing a 15 year old process that has been database driven utilizing the same technology as all the major Internet search engines and portal providers. This ensures high availability and quality of service for all of our clients. We understand the necessity of delivering a first class service; offering this is the reason for our extensive investment into our proprietary software. This clearly illustrates our commitment to provide industry leading results for each and every client. We have successfully removed every form of negative credit yes including bankruptcies, Tax Liens, Judgments, Foreclosures, Repossessions... We also focus on the rebuilding of positive credit with the ability to supply our clients with step-by-step directions of exactly what to do, when and how for the best possible score increase.
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Yes we leverage loopholes in the laws that govern the Credit Bureaus and creditors to permanently remove negative credit on behalf of our clients. In summary we are applying the knowledge gained over the last 15 years to force the Credit Bureaus and creditors to correct inaccuracies in their reporting. The permanent correction of these inaccuracies has enabled us to permanently remove every form of negative credit. Yes our legal process provides permanent industry leading results.
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Absolutely, but first answer these few questions: 1. Do you know how to read a copy of your credit report? 2. Do you know the loopholes in the law to leverage for the permanent removal of a slow payment? 3. Were you aware that there are numerous different strategies for credit repair and not all of them provide permanent removal? Yes you can attempt to repair your own credit. It is possible but not very probable. In enrolling numerous clients that were unsuccessful in repairing their own credit, we have noticed the following: 1. 1 out of 100 individuals were claiming success in repairing their own credit. 2. It took an average of two years for the alleged successful individuals that had repaired their own credit to get enough results to utilize their credit again. 3. Those alleged successful clients ended up enrolling with us the next time they experienced some credit trauma. The common response we have received was that for the nominal fees we charge, it is not worth their time and trouble.
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The process is very simple, as a reminder we do all the work.
1. You submit your order online or in person with payment.
2. We receive your order and pull credit on you.
3. We identify all the negative credit within your credit report.
4. We then create you an account in out database (Which E-Mails your login information).
5. We then input every negative item for all three credit bureaus classifying each item and matching it with the appropriate loophole in the credit laws for removal.
6. Then we create our disputation that is sent directly to all three credit bureaus
7. We then send you a welcome packet that once again goes over the process and provides all of our support contact information.
8. You will receive reports in the mail from all three credit bureaus that will provide round results. The only thing that you have to do to ensure maximum results is to fax or mail these reports and all correspondence from the three credit bureaus to the processing center and we do everything else.
9. You will receive reports/correspondence from all three credit bureaus every 45 days
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It is very important that you understand how the paying of collections impacts your credit report. For this discussion let's imagine you have a $65 medical collection. I know what you are thinking let me just pay them the $65 and get this taken care of. There are a couple of different scenarios when you pay a collection:
1. The collection agency collects your $65 and then just sells the debt to another collection agency.
2. The collection agency collects your $65 and then updates your credit report to a zero balance indicating that you no longer owe this debt. Now for the bad news you just lowered your score. When the collection agency updated your credit report to a zero balance it also updated the date of last activity. When a negative item is fresh it carries a higher point value then after it seasons for a while. In summarization, You just paid money to lower your credit score!
Our process is setup to permanently remove collections whether the debt has been paid or not.
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We advise our client to inform all collection agencies the following:
" WE DO NOT HANDLE OUR BUSINESS OVER THE TELEPHONE PLEASE SEND US SOMETHING IN THE MAIL "
The collection agency obviously is not going to just hang up. Repeat this a couple of times to them and then just tell them the following: " I AM GOING TO HANGUP NOW "
NO CURSING, NO THREATS ABOUT LAWSUITS, NO YELLING
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Every client receives results every 45 days. We refer to this 45 day cycle as a round of credit repair. Every client's credit repair needs are different because credit reports are like fingerprints, every one is different. In performing credit repair over the years we have noticed that credit repair clients fall into one of two categories:
Category 1 = These are the clients that just need an improvement of 50 points or less in their credit score to obtain the financing they are after.
Category 2 = These are the clients that need more than a 50 point improvement in their credit score to obtain the financing they are after. Fact Most Category 2 clients have two problems with their credit report. They obviously have negative credit in their credit report. This negative credit has restricted the client from getting further financing so the client has been forced to operate in cash & carry mode. This cash & carry mode leaves the client without positive credit to pull the credit score up as the negative item are removed from the client's credit report. These clients will need to strengthen their credit with the addition of positive credit. See next FAQ for details on how to add positive credit.
Most Category 1 clients can start using their credit again after 2 to 3 rounds of credit repair. Category 2 clients need to allow 3 to 4 rounds before anticipating using their credit.
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Positive Credit can come in a couple different types. The strongest positive credit is open accounts that have never been paid late. Closed accounts that were paid off and never paid late are also positive credit however these credit lines do not carry the point value of open never paid late credit lines. In fact, most low interest rate lender programs for home mortgages require a minimum of three open, positive (Never Paid Late) credit lines. Over the years we have tried a lot of different sources for the legal addition of positive credit. Ask your NGF Representative about what your options are.
We tell our clients who need to strengthen their credit to use secured credit cards to purchase gas once a month and then pay it off early every month and in about 6 months you should be able to qualify for an unsecured credit card. After you get your unsecured credit card you can cancel the secured credit cards and get your security deposit back. Basically this is what it takes to get your credit back on track when your situation requires the addition of Positive credit lines.
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There are a lot of other sources for the addition of positive credit however these other sources are not reliable and sometimes illegal. Probably the most common other source for adding positive credit is the Authorized User strategy. You find someone with a credit card with good payment history and a low balance and they add you as an authorized user on their credit card so that you obtain their credit history on this account. Here are a couple problems with this strategy:
1. Most Credit Card companies are not reporting credit on authorized users anymore unless it is negative. Think about it, you go in for a home loan you are 10 points shy of qualifying for 100% financing so the loan officer instructs you to contact a family member to add you as an authorized user. Fast forward 30 days later, your loan officer pulls your credit again and you qualify for 100% financing. You close on your loan and then your family member cancels you as an authorized user. Yes you purchased the home however you and your loan officer just committed loan fraud and the credit card company took a loss by issuing and canceling credit cards and reporting your info to all three credit bureaus.
We do not advocate shortcuts that leave our clients in compromising positions!
What if I don't have a Computer or Internet Access?
Obviously one of the strengths of our program is the ability of our online results tracking. However we do realize that in order for our clients to access their account online they will need a computer with internet access. We provide unlimited toll free customer service. This toll free customer service is available Monday thru Friday 8am - 5pm CST. Customer Service is available in both English and Spanish. Si, ayudamos a nuestros clientes en ingles y espaol.
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Contact your National Growth Funding Representative today to see how we can help you and your business!!
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