Question

E. I. James is a writer with a best selling novel. He wishes to create a corporation called "James, Inc." He will be the only shareholder. Can James incorporate his business of writing?

a.Yes, this would be the incorporation of a sole proprietorship.
b.No, the law requires at least two people to be shareholders of a corporation.
c.No, the law does not permit a person to, in effect, incorporate himself.
d.Only if he forms an S Corporation.

Answer 1

E. I. James can incorporate his writing business as a private company with himself as the sole shareholder, legally forming 'James, Inc.' as either a standard corporation or an S Corporation.

Step-by-step explanation:

E. I. James can indeed incorporate his business of writing. Incorporation is a process that allows entrepreneurs to limit their legal and financial liabilities, safeguarding personal assets by separating them from the business entity. A private company can be owned and operated by an individual, known as a sole proprietorship, or it can be structured as a corporation, with the individual as the sole shareholder.

There is no legal requirement for a corporation to have more than one shareholder; hence, James, Inc. can legally be formed with E. I. James as the sole shareholder. An S Corporation is merely one type of corporation that can be chosen, offering certain tax benefits, but it is not a prerequisite for James to incorporate his writing business.