Incorporating Your Business: What are the Benefits?
If growing your business is a top priority for yourself or your partners, incorporating is an option to help you achieve that objective. Selecting the best form of incorporation will help your business increase its opportunity for financial and operational success. When a business incorporates, it is defining itself on a strategic and legal level. You would not construct a building without detailed plans and drawings, so why would you build a business that way?
5 Benefits of Incorporating Your Business
- You Protect Yourself– Businesses that are incorporated give owners a certain layer of protection if the business were to fail. If bankruptcy were to occur, an owner’s assets are completely separated from their personal ones; owners would have a limited amount of liability. If a business was not incorporated and it had to close its doors, the owner would not be able to keep their personal and business assets apart. Personal assets, such as a home or vehicle, may be seized to pay back creditors.
- It is Easier to Access Capital– When compared to sole proprietorships, it is generally easier for corporations to raise money because they can issue stock shares. If the business needs a substantial amount of capital, obtaining a bank loan will also be easier because corporations usually have alternative revenue sources they can access to pay off their loans. With this influx of money, a business can easily increase their size.
- Your Business will Live on– If a business is incorporated, it will continue to exist after the passing of its owner. Any deaths or retirements of owners, shareholders, or directors will not affect the operational ability of an incorporated business because the company is viewed as a separate legal entity by the law. If you dream of passing your business down to the next generation, incorporating will help make that dream a reality.
- Your Credibility will Increase– Consider this question: would you rather conduct business with a company called Globex or Globex Incorporated? Did you pick Globex Incorporated because it sounds more legitimate? Adding “Inc.” or “LLC” after your business name can instantly generate credibility with consumers, partners, and vendors.
- You’ll Have a Tax Shelter– There are several more tax options available to corporations than there are to partnerships or proprietorships. The business would be able to create a pension, establish profit-sharing, and deduct certain insurance premiums. You can further decrease your tax burden if you pay the salaries of employed family members.
When to Involve a Lawyer When Incorporating
Incorporating a business is a complex process that must comply with set rules. Involving an incorporation attorney right from the beginning can help the business strategically, as they will advise you on the business structure that will give you the best advantage. An incorporated business can have different forms such as a corporation or an LLC. Ultimately, there is a high value of hiring an incorporation lawyer; they will help you determine which business structure will suit the company better.
Incorporating is a strategic business decision for companies wanting to expand. Additional benefits of incorporating also include a layer of protection for owners, easier access to capital, a perpetual existence for the business, increased credibility, and a tax shelter. Juriscorp is a trusted incorporation lawyer that has helped many businesses make the incorporated leap. Let us add your business to that growing list.