The Lifespan of Corporations: Do Corporations Have Unlimited Life?

Corporations are a type of legal entity that can exist without the ownership of its members. A corporation can continue to exist even if its owners pass away or sell their shares, which is one of the fundamental benefits of creating one. But is the idea that corporations have an endless lifespan actually true? Let’s investigate this issue and some connected ones. Do Corporations Have an Endless Lifespan? In a nutshell, yes, companies have an endless lifespan. Contrary to sole proprietorships and partnerships, which end when their founders pass away or quit the company, corporations can remain perpetually. This is so because companies are distinct legal entities that are able to sue or be sued in their own names, own property, and enter into contracts. A corporation may continue to exist even if its original owners are no longer active as long as it abides by the laws of the state in which it was founded. Can I operate more than one business under the same corporation? You can run many enterprises through a single corporation, yes. When a parent company owns one or more subsidiary companies, this type of arrangement is known as a parent-subsidiary relationship. Each subsidiary may conduct business independently, with independent management, personnel, and resources. This structure has the benefit of allowing the parent company to diversify its commercial ventures while protecting each subsidiary from the obligations of the others. Can a S Corporation Own Real Estate?

An S corporation can indeed own property. In reality, a lot of S corporations are created particularly for the ownership of real estate, such residential or commercial properties. The S corporation’s stockholders receive a pass-through of the real estate revenue, which they then disclose on their individual tax filings. The kinds of assets that a S company may own, such as shares in other businesses or partnerships, are subject to specific limitations. Does obtaining an EIN cost money?

No, the IRS does not charge anything to get an Employer Identification Number (EIN). For tax purposes, a business entity is identified by a nine-digit number called an EIN. The majority of business kinds, including corporations, partnerships, LLCs, and sole proprietorships, that employ people or file certain tax returns must have it. An EIN application can be submitted via phone, fax, mail, or internet.

Yes, if an LLC has more than one member or any workers, it must have an EIN. If an LLC satisfies these requirements, it need an EIN even if it is taxed as a sole proprietorship. When opening bank accounts, applying for business permits, and filing tax returns, the LLC is identified by its EIN for taxation purposes. An LLC may request an EIN via phone, fax, mail, or internet.

In conclusion, one of the key benefits of founding a corporation is that it is possible for corporations to exist indefinitely. In addition, a corporation and a S corporation both have the ability to own real estate. Both corporations and LLCs require an EIN for tax purposes, and obtaining one is free. Making educated judgments about a company’s legal structure and activities can be facilitated by understanding some fundamental tenets of corporate law.