I have some questions about corporations?

Question

What are the good sides of starting a corporation?

and the bad?

Can it just be one person?

Do i need a lot of money to start if i want to start a real estate holding company?

i know im going to need money to buy land, but do i really need money like if i were to start a restaurant, nightclub, etc?

Answer 1

A corporation is a legal entity, meaning it is a separate entity from its owners who are called stockholders. A corporation is treated as a “person” with most of the rights and obligations of a real person. A corporation is not allowed to hold public office or vote, but it does pay income taxes.

ADVANTAGES OF THE CORPORATION
* Limitations of the stockholder's liability to a fixed amount of investment. However, do not confuse corporate liability with appropriate liability insurance considerations.
* Ownership is readily transferable.
* Separate legal existence.
* Stability and relative permanence of existence. In the case of illness, death, or other cause for loss of a principal officer or owner, the corporation continues to exist and do business.
* Relative ease of securing capital in large amounts and from many investors. Capital may be acquired through the issuance of various stocks and long term bonds. There is relative ease in securing long term financing from lending institutions by taking advantage of corporate assets and often personal assets of stockholders and principals of guarantors.
* Delegated authority. Centralized control is secured when owners delegate authority to hired managers, although they are often one and the same.
* The ability of the corporation to draw on the expertise and skills of more than one individual
* May have one or more owners

DISADVANTAGES OF THE CORPORATION

* Activities limited by the charter and by various laws. However, some states do allow very broad charters.
* Manipulation. Minority stockholders are sometimes exploited.
* Extensive government regulations and required local, state, and federal reports.
* Less incentive if manager does not share in profits.
* Expense of forming a corporation.
* Double tax - income tax on corporate net income and on individual salary and dividends.

A real estate company is basically a service co. and is not capital-intensive, so you should not need a lot of money to start one. Most of the time, you'd be conducting viewing of accommodation to potential owners/tenants and will be out of the office so you don't even need a swanky office. But you need good networking and time to build up a clientele.