 |
Missouri Corporation
|
Should I Incoprorate in Missouri ?
A corporation, chartered by the state in which it is headquartered, is considered by law to be a unique entity, separate and apart from those who own it. A corporation can be taxed; it can be sued; it can enter into contractual agreements. The owners of a corporation are its shareholders. The shareholders elect a board of directors to oversee the major policies and decisions. The corporation has a life of its own and does not dissolve when ownership changes.Missouri Corporate Requirements
Director Information
- Minimum Number - Not less than three, unless there are only one or two shareholders of record; then the number of directors may be less than three but not less than the number of shareholders.
Residence Requirements - No provision.
Age Requirements
- Directors must be a natural person at least 18 years of age.
- Directors are not required to be listed in the articles of incorporation.
Officer Information
- Officers are not required to be listed in the articles of incorporation.
Stock Information
- An increase in shares may cause an increase in initial filing fees. Corporate Records
- The stock transfer ledger must be kept at the principal corporate office.
Advantages and Disadvantages of a Corporation
Advantages of a Corporation- Shareholders have limited liability for the corporation's debts or judgments against the corporations.
- Generally, shareholders can only be held accountable for their investment in stock of the company. (Note however, that officers can be held personally liable for their actions, such as the failure to withhold and pay employment taxes.)
- Corporations can raise additional funds through the sale of stock.
- A corporation may deduct the cost of benefits it provides to officers and employees.
- Can elect S Corporation status if certain requirements are met. This election enables company to be taxed similar to a partnership.
- A corporation pays 15% federal income tax on taxable income up to $50,000; 25% tax on income from $50,001 - $75,000; 34% tax on income from $75,001 - $100,000; 39% tax on income from $100,001 - $335,000; and 34% tax on income over $335,000.
- A sole proprietor who filed a federal income tax return under the status of married, filing jointly, would pay 15% federal income tax on taxable income up to $35,800; 28% tax on income from $35,801 to 86,500; and 31% tax on income over $86,501.
Disadvantages of a Corporation
- The process of incorporation requires more time and money than other forms of organization.
- Corporations are monitored by federal, state and some local agencies, and as a result may have more paperwork to comply with regulations.
- Incorporating may result in higher overall taxes. Dividends paid to shareholders are not deductible form business income, thus this income can be taxed twice.
Federal Tax Forms for Regular or "C" Corporations
- Form 1120 or 1120-A: Corporation Income Tax Return
- Form 1120-W Estimated Tax for Corporation
- Form 8109-B Deposit Coupon
- Form 4625 Depreciation
Missouri’s Business Tax Climate Ranks 15th
Missouri ranks 15th in the State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Iowa (43rd), Nebraska (44th), Kansas (31st), Oklahoma (21st), Arkansas (35th), Tennessee (18th), Kentucky (39th) and Illinois (25th).
Missouri’s State/Local Tax Burden among Nation’s Lowest
During the last three decades Missouri's state and local tax burden has consistently been well below the national average. Estimated at 10.1% of income, Missouri's state/local tax burden percentage ranks 34th highest nationally, well below the national average of 11.0%. Taxpayers in Missouri pay $3,678 per capita in state and local taxes, and per capita state income is $36,341.
Missouri’s Individual Income Tax Systems
Missouri’s personal income tax system features ten separate income brackets (no other state has more) with a top rate of 6% kicking in at a relatively low income level of $9,000. Missouri’s top rate of 6.0% is 23rd highest among states levying personal income taxes. Missouri's 2002 individual income tax collections were $638 per person (ranked 25th highest nationally).
Missouri’s Corporate Income Tax Rate Among Lowest Nationally
Missouri’s corporate tax structure consists of a flat tax of 6.25% on all corporate income. This tax rate ranks the state 31st highest among states levying corporate income taxes. In 2000, state and local corporate tax collections reached $93 per capita, ranking the state 24th nationally.
Home | Site-Map