Many business owners opt to incorporate their business to protect themselves and the business from unanticipated losses and liabilities. Both small as well as large businesses can be incorporated. It is possible to incorporate businesses in any state in the United States, regardless of where the business is operated. Many business owners choose to incorporate their businesses in Delaware or Nevada, as they are very corporate-friendly. Nevada has highly favorable corporate laws. Many new business owners and small business owners lack adequate knowledge about the corporate laws prevailing in Nevada. The most frequently asked questions about Nevada corporations, include what are the different types of corporation entities, the process of incorporation, and what are the advantages of Nevada corporations.

A corporation is considered as a separate legal entity. If the corporation is sued, the business owners and the officials are protected from personal liability.

Business owners have to select the type of entity that best suits their business. An S-corp refers to a corporation that has elected a special tax status. A C-corp type of corporation pays their tax directly to the IRS. LLC or limited liability company is an unincorporated legal entity created under state law.

The process of incorporating in Nevada is similar to other states. "Articles of incorporation" are filed with the state to receive its approval to form a corporation. Articles include various details of the business such as the state where it is operated, and the nature of the business. Business owners have to pay the prescribed fees for incorporating their businesses.

Nevada corporation offers unbeatable benefits to business owners. They do not have to pay a corporate income tax or taxes on corporate shares. Business owners do not have to pay any franchise tax or any personal income tax either. Along with directors, Nevada incorporation protect officials from personal liability as well.

It is advisable for new business owners to utilize the services of Nevada corporation planners who are specialized in Nevada corporate laws. They can also provide information about all the aspects of Nevada incorporation on the Internet.

Business valuation is very important for a business owner as it gives a clear picture of the company's strength, weaknesses and progress. Determining the value of a business is considered necessary for various purposes such as estate planning, business succession planning, loan application, buy-sell funding, charitable giving and financing.

In order to optimize business value for future sale, business valuation planning is necessary. It is very useful for business owners who want to prepare their business for sale, market their business to buyers, and facilitate the transfer of ownership of their business. A business valuation prepared before a liquidation event helps the business owner to save both time and money. So, a proper business valuation planning is crucial.

There are several business valuation techniques, ranging from simple business valuation methods to more complex processes that include asset valuation and industry average valuations. Income approach, asset approach and market approach are the three main approaches that determine the value of a business. Before applying a particular business valuation method, the appraiser should adjust the income statement and subject balance sheet.

Certain business valuation techniques give importance to the future, while others place emphasis on historical performance. If the business is valued for sale, then an appraisal that gives importance to future earning power would result in a higher estimated value than one that emphasizes historical performance. The earning power may be measured as net income, operating income or cash flow. On the other hand, if the business is valued to establish estate, gift, inheritance or ad valorem taxes, then a conservative estimate based on historical earnings will result in a lower value.

The help of professionals including business brokers, business advisors or certified public accountants is essential for an accurate and reliable business valuation. Today, an assortment of business brokerage companies provides consulting services to make your business flourish.

Business valuation refers to the process of determining the value of a business entity or ownership interest therein. It is a tool used to accurately assess the value of any business. Regarded as a special mix of art and science, business valuation is essential for buy/sell agreements, mergers and acquisitions, estate planning, bankruptcies and gift tax planning.

Determining the value of any business is a complex process, as there are different methods to determine the market value of an enterprise. Factors to be considered during the business valuation process include business earnings, nature of the business, history of the enterprise, economic outlook in general, outlook of the specific industry, book value of the stock and the financial condition of the business.

The valuation methods depend on the stage of development of the company being evaluated. To be more precise, business valuation methods for early stage companies are different from growth stage companies and maturity stage companies. In early stage companies, business is valued based on the management's contribution or investment in the form of hard dollars, effort, intellectual value and opportunity cost. In growth stage companies, it is based on comparable company multiples of sales. In maturity stage companies, the comparable earnings multiples form the crucial aspect. In all cases, business valuation is associated with potential growth and earnings.

Other methods are also employed in calculating the value of a business. They include the multiplier or market valuation method, the asset valuation method, the capitalized earnings method, the owner benefit valuation method, and the return on investment method. Multiplier or market valuation method determines the value of a business using the industry average sales figure as a multiplier.

Another commonly used method is the asset valuation method. It is used to assess the value of assets that will be transferred on the sale of the business. Capitalized earnings method is well suited for service companies and other non-asset intensive businesses. Owner benefit valuation method mainly focuses on the owner's benefit. It is used most often for businesses whose primary value comes from their ability to generate cash flow. In return on investment method, a business is valued through its return on investment.

Considered a part of the annual strategic planning process, business valuation is the process of determining the estimated market value of a business enterprise. It is a valuable tool for business owners, stockowners and investors. Business valuation is used for a variety of purposes such as buy/sell agreements, mergers and acquisitions, estate planning, bankruptcies and pension plans.

1. Why is business valuation important?

Business valuation is very important as it is regarded as the heart of a buy-sell agreement instituted between business owners. It is important not only for a business owner preparing for a sale, but also for numerous business and legal situations that need a detailed valuation.

Business valuation is conducted while buying or selling shares to employees, planning gifts to heirs, retiring and selling to other family members, providing adequate key man insurance coverage and creating a basis for compensating key non-family management.

2. What are the different business valuation methods?

There are several methods to determine the market value of an enterprise. Business valuation methods are categorized as market-based methods, income-based methods, asset-based methods and hybrid methods. One can select the method depending on the particular valuation need.

3. What are the reasons for conducting a business valuation?

Business valuation is conducted for the valuation for tax purposes and ownership transfer. Besides, it is necessary for financing or insurance purposes.

4. What are the factors to be considered in a business valuation process?

Business earnings, availability of assets, nature of the business, history of the enterprise from its inception, the enterprise's goodwill and other intangible values, economic outlook in general, outlook of the specific industry, book value of the stock, and the financial condition of the business are some of the factors to be considered during a business valuation process.

5. How much do business valuation services cost?

The cost of business valuation services varies significantly with the size and complexity of the business being evaluated. Other factors such as business cash flow, age of business, owner involvement, revenue, availability of vendor financing and profitability also determine the costs. In general, the cost of business valuation services range from a minimum of $1500 to thousands of dollars.

In a constantly fluctuating business market, it is very important for a business enterprise to get a regular business valuation. Having a current business valuation helps to determine what a company is worth today. Besides, it informs the owner about the financial condition of the firm and assists in quick decisions on buying, selling and merger of businesses.

Business valuations are normally prepared by professionals such as business appraisers, business brokers, certified public accountants, financial analysts and economists. Chances of business valuation mistakes are more if business valuation reports are prepared by an inexpert. Mistakes in business valuation reports may affect the accuracy, validity, credibility and reliability of the business appraisal. So, a professional with knowledge, experience and proper accreditations in business valuation must be approached.

The use of a business valuation method that is not accepted by courts is a quite common error in the valuation of businesses. This mistake is frequent with appraisers who are unfamiliar with the practice of family law. Discounted future earnings method, acceptable as a valuation method for certain types of businesses, is not used in valuing a professional practice. Hence, discounted future earnings method can be considered as another error.

Business valuation mistakes may also include the use of valuation methods that do not consider all of the business assets. An appraiser relying on a particular business valuation method should ensure that the selected method can consider all the assets of the business. Application of value multiples to the wrong income stream, omission of certain assets or liabilities and omission of minority discounts may result in business valuation mistakes. Failure to mention the date of the valuation and the date prepared is also considered as a mistake in business valuation reports.

In any business entity, the type of business determines the income tax return form to be filed. In other words, the business structure determines the legal and tax considerations. S Corporation is one of the most common forms of business structure with a limited number of shareholders that is treated as a partnership for tax purposes.

An S Corporation is a type of corporation that is taxed under subchapter S of the Internal Revenue Code. Small business proprietors commonly use the S Corporations structure. There are no corporate taxes. Profits and losses directly pass to stockholders. S Corporations allow pass-through tax treatment and thus avoid double taxation associated with standard C corporations. The percentage of ownership determines the percentage of pass-through income. An S Corporation can have only one class of stock. It can have a single owner and cannot have associated self-employment taxes. The ownership of an S Corporation is restricted to no more than 75 shareholders. The shareholders must be citizens of the Unites States. In order to be treated as an S Corporation, all shareholders must sign and file IRS Form 2553.

For federal taxation purposes, the S Corporation files its annual return using Form 1120S. The 1120S is an informational return. It simply informs the federal tax authorities the amount of net profit or loss made by the S Corporation. There is no tax payment or refund associated with the 1120S tax return, as the S Corporation does not have independent tax status. The S Corporation is managed and run by its directors and officers. The directors are appointed by shareholders and are responsible for corporate governance and overall management of the corporation. The directors in turn appoint officers for the day-to-day management and operations. In small businesses, one person can be the only shareholder, the only director, and the only officer. In order to qualify as an S Corporation for the 2006 tax year, the corporation must file the IRS Form 2553 by March 15, 2006.

S Corporation is an elective provision that permits small business corporations and their shareholders to elect special income tax treatment. In S corporation status, corporate income tax can be avoided and shareholders can claim corporate losses. These are domestic corporations that can avoid double taxation by electing to be taxed under Subchapter S of the Internal Revenue Code. The S corporation cannot have more than 75 shareholders. Only certain entities and individuals are allowed to be shareholders. All S Corporation shareholders must be U.S. citizens or permanent resident aliens. S Corporations may have only one class of stock. It is exempted from federal income tax other than tax on certain capital gains and passive income.

S corporation is a for-profit corporation that begins to exist upon filing the Articles of Incorporation at the state level. S Corporation status can be obtained by submitting IRS form 2553 to the Internal Revenue Service. Taxation is done as a partnership or sole proprietorship rather than as a separate entity. For purposes of computing tax liability, income is "passed-through" to the shareholders in S corporation. Thus, the individual shareholder's tax return will report the gain or loss generated by the S corporation.

The IRS treats corporate income and corporate losses very differently when a corporation has elected S Corporation status. Therefore, businesses that need the limited liability of a corporation and the pass-through tax treatment of a partnership will elect S corporation. In general, S corporation structure is preferred only when shareholders are employed at least half of the time within the corporation. In other words, the shareholders intemperately manage the corporation's daily activities and income is distributed to them each year.

A financial advisor would be able to guide you in terms of S corporation status as to whether it would yield a profit for your business. If you plan to draw a very low salary and leave most of the corporate earnings in the corporation for reinvestment, S corporation may not be the right choice for you.

S Corporation is an elective provision that permits small business corporations and their shareholders to elect special income tax treatment. To become S Corporation or Small Business Corporation, the IRS has several special requirements.

The corporation must timely file IRS Form 2553 with the IRS. This election must be made by March 15 of the current year, if the corporation is a calendar-year taxpayer. The election will then take effect for the current tax year. A new corporation must make the S election within 75 days of formation; otherwise, it will be a C corporation for the first year and an S corporation thereafter.

The S corporation must not have more than 75 shareholders. Before 1997, the limit was 35. A married couple is counted as one shareholder. The shareholders of an S corporation must be individuals, certain estates or trusts. All stockholders must consent to the S corporation structure formation. Each shareholder must be a citizen or resident of the United States. The S corporation can have only one class of stock. However, voting and nonvoting shares are not considered to be two separate classes. Preferred stock is not allowed. Debt is not considered a second class of stock unless it is classified as equity. There are 3 requirements for debt to be acceptable for subchapter S election - its interest is not tied to profits, the debt is not convertible and the creditor must be an individual.

The S corporation must be a domestic corporation. That is, a corporation organized under the laws of the United States, a state, or territory that is taxed as a corporation under local law. Prior to 1997, an S corporation could not have subsidiaries, and could not be a member of an affiliated group of corporations. Since 1997, an S corporation can hold qualifying wholly owned subsidiaries and can own 80 percent or more of the stock of a C corporation. The C corporation subsidiary can elect to join in the filing of a consolidated return with its affiliated C corporations. But the S corporation cannot join in the election. The corporation must use the calendar year as its fiscal year unless it can demonstrate to the IRS that another fiscal year satisfies a business purpose.

The owners of any business, irrespective of the size, can benefit from incorporating. With the Tax Reform Act of 1986, the S Corporation became a highly desirable entity for corporate tax purposes. An S Corporation is a special tax designation granted by the IRS to corporations. Many small business owners and entrepreneurs prefer S corporation because it combines many of the advantages of a sole proprietorship, partnership and the corporate forms of business structure. One person can form an S corporation, but is restricted to no more than 75 shareholders. The corporation must be formed in the United States and all shareholders must be individuals. The advantages of S corporations include limited personal liability, pass-through of losses, no corporate taxes and no shareholder FICA tax on net income.

When S corporation is elected, the income, losses and other elements of tax treatment, flow directly to the shareholders. S corporation generally provides employee benefits and deferred compensation plans. The stock of S corporations is freely transferable. Free exchangeability of interest means that shareholders are able to sell their interest without obtaining the approval of other shareholders. S corporations may be advantageous in terms of self-employment taxes. S corporations can save their owners self-employment or Social Security/Medicare taxes.

If your corporation desires to retain earnings, S corporation status can be used to avoid penalty taxes that could be imposed on an unreasonable accumulation of earnings. S corporation status strikingly reduces the potential problem of IRS claims of excessive compensation of shareholders. Tax savings can be realized on all taxable income of the corporation because individual tax rates are lower than corporate tax rates. If your corporation expects to generate capital gain income, the S corporation can make distributions to its shareholders and pass the capital gain of the income directly to shareholders. If the S corporation generates substantial cash not used in the operation of the corporation, that cash can be distributed to a shareholder on the basis of his or her ownership interest in the corporation.

Business forms are very essential in every business concern. Both manual as well as computerized business forms are used to maintain company data. The complete data storage will help a company conduct its business processes in a proper and secure manner. These forms are proofs of your business status. With these forms, you can store and retrieve data for any kind of analysis.

Invoice forms, multipurpose forms, statements, tax forms, and purchase order forms are some of the manual forms. Accounting software, back office software applications, and quality checks are some examples of computerized forms. Manual forms are printed using high quality papers with excellent printing and proper formatting. These computer forms will make your business processes easy and effective.

Business forms are available in different kits for different kinds of businesses like stock marketing, consultancy, corporations, and real estates and for all commercial businesses.

Legal and government forms like employment administration, compensation, copyrights, passports, occupational safety and health administration are additional forms which will be needed for your business in most circumstances.

Apart from this specific form, collections are available for specific tasks, like legal documents, employment forms, stock forms, venture capital forms, and financial statement forms.

Manual business forms are generally word documents, available in CDs. These computer software packages are downloadable versions and are also available in CDs. These CDs cost about $99. You can easily purchase both forms through Internet. There are a number of dealers on the Internet offering high quality business forms in affordable rates. Some dealers offer free shipping for these packages. There are some effective software for form creation, with which you can create your business forms as per your norms.

To make your business process easy and fast, some websites offer templates for most business forms that you would need. You can easily download the templates, and fill appropriate company and business details.

These business forms help you maintain up-to-date business records in an effective manner. These business forms help you to enhance your business.