Hello,
The object today is to explain the procedure of making a Company into a Corporation and why. In the next post we will move the Corporation onto the Stock Market to raise more capital for expansion.
The CEO is our old friend (Mr.M) and he represents the board of directors of a Corporation called "UP YOURS" dedicated to the suppository business with sales to a large group of Pharmaceutical Companies. Business has been extremely good in spite of the downturn due to the large number of newly elected politicians whose needs are involved with the company and who have been willing to sponsor elements of "Up Yours" as a growth factor.
The CEO made the COMPANY into a CORPORATION largely as a means of protection for the personal assets of the SHAREHOLDERS against possible claims from creditors. So they are no longer personally liable for the debts and obligations of the business. That includes LOANS made by the company, accounts payable (CHARGES from others) or FAULTY OR DEFECTIVE suppositories.
The State Incorporation law allowed them to file at the same time as incorporation, a DBA/FICTITIOUS NAME (doing business as/fictitious name). States differ in their rules on this. So the company was named in the INCORPORATION PAPERS "Up Yours" and that became it's DBA.
The Attorneys in the law firm, "YOU NEED REPRESENTATION", filed the INCORPORATION papers with the Department of State, after recommending to the CEO that with only 95shareholders the company could become an S CORPORATION to avoid double TAXATION on the CORPORATE INCOME. The IRS (INTERNAL REVENUE SERVICE) allows this for a Corporation that has eligible domestic trade, one class stock,and no more than 100 shareholders All the Shareholders had to sign an IRS form since shareholders must report a flow through in their personal tax accounts of income and losses and are assessed tax at their individual rates. Upon completion the company was offered a CERTIFICATE OF STATUS, EIN (Identification number from the IRS), STOCK CERTIFICATES, COMPANY KIT, and a REGISTERED AGENT'S service for an additional fee.
The CORPORATION has enjoyed enormous profits although they are finding governmental interference in their structure to be a burden that they would like removed. Accepting Federal government sponsorship and loans will keep them from expanding while they repay their debt. At that time they can attempt to disengage themselves from the restrictions the Federal Government has placed upon them.
Federal or State Government assistance with your business is another double edged sword. The cash you may need for COST OF BUSINESS under certain circumstances is often readily available but carries with it an Umbilical cord that can move you from private potential to government control and choke off rational growth. Cutting the cord strangling your assets is not as easy as getting involved.
Our CEO, clever man that he is, manages to extricate the profitable CORPORATION from GOVERNMENT CONTROL, pay up the debts, BOOST PROFITS to such an extent that the Corporation is ready to GO PUBLIC (sell stock publicly and be a part of the stock market). If the CEO is able to put the Corporation in good standing on the market, he stands to receive a huge bonus. It's unnecessary to say that he works furiously to get the job done. Before our CEO goes public, let's take the time to deal with another issue. CEO MONETARY ENDORSEMENT OR BONUS PAY.
There's a lot of palaver about Corporations paying out monster sums (CEO BONUS PAY) to the head of their business. Good CEOS are so talented in their fields that they make the Corporation the profits needed by doing multiple tasks above and beyond normal business skill level. CEOS are highly sought and competition for them is keen.
Corporations make mistakes in their selection just as we make mistakes electing Presidents but we both choose from the given talent field.
Compare a CEO to Madonna (received monster sums) especially in her prime. Can "Cookie J.", the girl next door, sing, shimmy her near naked body, act, choreograph entertainment programs, run her career, sleep around, and manage her business portfolio while drawing in horrific numbers of fans? Maybe. Sooooooooooo....why isn't she in the TALENT LOTTERY that goes on to find the best, most talented, and brightest among us. Obviously, "Cookie" lacks some "X" factor of the Stars in any field. What is that "X" factor? Opportunity? Determination? Personality? Hidden skills? Workaholism? Passion? If we really knew we'd bottle it and sell it at Walmart's thousands of stores! Walmart is a CEO star story if there ever was one.
Yeah, the sum paid to the top talent in a variety of fields is obscene while we overlook monetarily some singular talents like Jonas Salk, who discovered the Salk Polio vaccine in the 20th Century and saved countless lives while stopping a crippling disease. He received a prize and little cash. He wasn't a candidate for the TALENT LOTTERY since his skills though brilliant were narrow in application and his ventures very risky. Thank God, we have people like Salk who carry hope to reality but as stars go in our star crazed society, few people remember his name.
One suggestion I have is that the Company Boards and CEOs in our country and perhaps globally rethink the structure of hiring a CEO because I believe it is fast getting out of hand. This would be applicable to the entertainment industry as well. A TALENT LOTTERY can be conducted with agreed maximum limits in cash and if necessary unlimited donations in the CEO's name to charitable concerns.
These are interesting puzzles for society to question but "Up Yours" wants Mr. M. as(CEO) and are willing to pay Big Time because he has the skill to lead, organize, structure loans, is conversant with national trends, pharmaceutical changes and can schmooze leaders and politicians on both sides of the Globe necessary to expand the Corporation into GLOBAL MARKETS eventually and make a really humongous PROFIT.
Our next post will deal with GOING PUBLIC on the STOCK MARKET and what that entails. That will put us very close to defining more parts of Economics.
Cheers, Connie
The object today is to explain the procedure of making a Company into a Corporation and why. In the next post we will move the Corporation onto the Stock Market to raise more capital for expansion.
The CEO is our old friend (Mr.M) and he represents the board of directors of a Corporation called "UP YOURS" dedicated to the suppository business with sales to a large group of Pharmaceutical Companies. Business has been extremely good in spite of the downturn due to the large number of newly elected politicians whose needs are involved with the company and who have been willing to sponsor elements of "Up Yours" as a growth factor.
The CEO made the COMPANY into a CORPORATION largely as a means of protection for the personal assets of the SHAREHOLDERS against possible claims from creditors. So they are no longer personally liable for the debts and obligations of the business. That includes LOANS made by the company, accounts payable (CHARGES from others) or FAULTY OR DEFECTIVE suppositories.
The State Incorporation law allowed them to file at the same time as incorporation, a DBA/FICTITIOUS NAME (doing business as/fictitious name). States differ in their rules on this. So the company was named in the INCORPORATION PAPERS "Up Yours" and that became it's DBA.
The Attorneys in the law firm, "YOU NEED REPRESENTATION", filed the INCORPORATION papers with the Department of State, after recommending to the CEO that with only 95shareholders the company could become an S CORPORATION to avoid double TAXATION on the CORPORATE INCOME. The IRS (INTERNAL REVENUE SERVICE) allows this for a Corporation that has eligible domestic trade, one class stock,and no more than 100 shareholders All the Shareholders had to sign an IRS form since shareholders must report a flow through in their personal tax accounts of income and losses and are assessed tax at their individual rates. Upon completion the company was offered a CERTIFICATE OF STATUS, EIN (Identification number from the IRS), STOCK CERTIFICATES, COMPANY KIT, and a REGISTERED AGENT'S service for an additional fee.
The CORPORATION has enjoyed enormous profits although they are finding governmental interference in their structure to be a burden that they would like removed. Accepting Federal government sponsorship and loans will keep them from expanding while they repay their debt. At that time they can attempt to disengage themselves from the restrictions the Federal Government has placed upon them.
Federal or State Government assistance with your business is another double edged sword. The cash you may need for COST OF BUSINESS under certain circumstances is often readily available but carries with it an Umbilical cord that can move you from private potential to government control and choke off rational growth. Cutting the cord strangling your assets is not as easy as getting involved.
Our CEO, clever man that he is, manages to extricate the profitable CORPORATION from GOVERNMENT CONTROL, pay up the debts, BOOST PROFITS to such an extent that the Corporation is ready to GO PUBLIC (sell stock publicly and be a part of the stock market). If the CEO is able to put the Corporation in good standing on the market, he stands to receive a huge bonus. It's unnecessary to say that he works furiously to get the job done. Before our CEO goes public, let's take the time to deal with another issue. CEO MONETARY ENDORSEMENT OR BONUS PAY.
There's a lot of palaver about Corporations paying out monster sums (CEO BONUS PAY) to the head of their business. Good CEOS are so talented in their fields that they make the Corporation the profits needed by doing multiple tasks above and beyond normal business skill level. CEOS are highly sought and competition for them is keen.
Corporations make mistakes in their selection just as we make mistakes electing Presidents but we both choose from the given talent field.
Compare a CEO to Madonna (received monster sums) especially in her prime. Can "Cookie J.", the girl next door, sing, shimmy her near naked body, act, choreograph entertainment programs, run her career, sleep around, and manage her business portfolio while drawing in horrific numbers of fans? Maybe. Sooooooooooo....why isn't she in the TALENT LOTTERY that goes on to find the best, most talented, and brightest among us. Obviously, "Cookie" lacks some "X" factor of the Stars in any field. What is that "X" factor? Opportunity? Determination? Personality? Hidden skills? Workaholism? Passion? If we really knew we'd bottle it and sell it at Walmart's thousands of stores! Walmart is a CEO star story if there ever was one.
Yeah, the sum paid to the top talent in a variety of fields is obscene while we overlook monetarily some singular talents like Jonas Salk, who discovered the Salk Polio vaccine in the 20th Century and saved countless lives while stopping a crippling disease. He received a prize and little cash. He wasn't a candidate for the TALENT LOTTERY since his skills though brilliant were narrow in application and his ventures very risky. Thank God, we have people like Salk who carry hope to reality but as stars go in our star crazed society, few people remember his name.
One suggestion I have is that the Company Boards and CEOs in our country and perhaps globally rethink the structure of hiring a CEO because I believe it is fast getting out of hand. This would be applicable to the entertainment industry as well. A TALENT LOTTERY can be conducted with agreed maximum limits in cash and if necessary unlimited donations in the CEO's name to charitable concerns.
These are interesting puzzles for society to question but "Up Yours" wants Mr. M. as(CEO) and are willing to pay Big Time because he has the skill to lead, organize, structure loans, is conversant with national trends, pharmaceutical changes and can schmooze leaders and politicians on both sides of the Globe necessary to expand the Corporation into GLOBAL MARKETS eventually and make a really humongous PROFIT.
Our next post will deal with GOING PUBLIC on the STOCK MARKET and what that entails. That will put us very close to defining more parts of Economics.
Cheers, Connie
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