A Beginner’s Guide to the Basics of Investing and Business
By: Peter Lynch and John Rothchild
Retold in notes by Harini Senthilkumar
How to form a corporation:
Pay a small fee
File papers in the state in which you want to maintain a legal address
Most Popular Choices:
Delaware
Laws are more favorable to business
Massachusetts
High ranking in the access to capital, startup activity, quality of life, and labor market
Wyoming
Especially well for taxes, cost of living, and the cost of starting a business
Iowa
Office space is the most affordable, with small business owners paying only $17 per square foot yearly for commercial office range
PRO TIP:
Whenever “inc.” is attached to the end of the name of a business, it means that the company already filed the papers to become a corporation.
(“Inc.” is short for incorporated)
Law Terms:
A corporation is an individual that can be punished for bad behavior. (Usually the imposition of a fine)
That’s the main reason why owners of business go to the trouble of getting incorporated
If they get in trouble and get sued, the corporation takes the blame and they get off the hook.
EXAMPLE:
You borrowed your parents' car — without permission— and crashed it into a tree Luckily, you’re incorporated.
