Kentucky Corporation

For Kentucky Corporation prices and State fees, please visit the costs page for forming a Corporation in Kentucky.

Kentucky corporation and corporation are general, for profit, corporations, refered to as "C Corporations", referring to Chapter "C" of the IRS tax code. A corporation is a separate legal entity and is, essentially, treated as a person, legally. The entity can own property, open bank accounts and credit lines and, under its own name, conduct business. The corporation is responsible for its own debts and actions, therefore (if the company is operated correctly) in the event of a lawsuit that forces the business into bankruptcy, the owners of the corporation are not liable for the corporate debt.

Kentucky corporation must observe some operating formalities and maintain its separate legal status. Holding shareholder meetings, at least annually, is one of these formalities. At these meetings the corporation shareholders discuss and decide on critical business matters and approve actions taken by the corporation for the operating period. These meetings should be recorded in the form of meeting minutes, this is a legal record that shows the shareholders are approving actions and the officers are indemnified by the stockholder approval of the business actions.

These entities are similar in that they provide protection against liability for their members/owners. Both corporations and LLCs are formed according to state law. Corporations are owned by shareholders and managed by a board of directors and officers. An LLC is owned by one or more members and may have one or more managers. Federal tax obligations differ. An LLC is taxed as a partnership by default. That is, the tax is paid by the owners rather than the company itself. For the LLC to be taxed separately from the owners, one must choose this election (8832 form). A corporation is taxed as a separate entity by default. For the corporation to be taxed in a similar fashion to a partnership (an "S" corporation) it must chose this election (2553 form). An LLC may offer increased asset protection when a business owner suffers a personal lawsuit. It is easier for a legal opponent to seize corporate shares than LLC membership. Thus, an LLC is often favored for use in owning investment real estate