Should I Incorporate My Business?

Whether you’re considering going into business or currently run your own company, one of the options you have available to you is deciding to incorporate. The public gives incorporated businesses a high level of legitimacy. That is the tip of the iceberg for benefits afforded to incorporating.

Separating Yourself from Your Business

Most businesses start as self-proprietorships and in the eyes of the federal government, there is no difference between you and your business. By incorporating your business you separate and protect each entity’s personal assets. Now, as an owner, you have a more limited amount of liability for business debts and obligations.

Tax Incentives

A business owner who incorporates his or her company is afforded a large number of tax benefits. Most times an owner is taxed twice when they own their own company, once as an individual and again as the business. This can be avoided with certain IRS filings that protect the owner of an incorporated company against double taxation. Incorporating will limit an owner’s exposure to personal liability.

Incorporating Lasts Longer Than a Lifetime

Once a company has incorporated it can exist in perpetuity. It won’t matter if the owner dies or ownership and management change. Ownership of an incorporated company is represented by its stock. The business can be transferred, sold, or given away to another family or anyone else.

Getting Some Extra Cash

An incorporated company’s limited liability makes it attractive to investors, when the need for extra capital may arise. If you aren’t looking for investors you can still incorporate so that your business can have its own credit profile. Now your company can borrow without relying on your personal credit.

First Steps toward Incorporating

If you decide to incorporate your business, you will need to work through the secretary of state’s office where your company is located. You will be required to provide articles of incorporation and company bylaws. You can always pay for an attorney to remove the stressful process from you.

Incorporating Protects You as the Owner

When a company decides to incorporate, it is creating a separate person. This artificial entity exists from any individuals that created or operate the business. There are some minor downfalls to incorporating that involve a lot of administrative paperwork and recording. Otherwise, choosing to incorporate a business protects investors, allowing business operations to be placed ahead of everything else.

Call Quest Consulting Services for questions you may have about franchising with us today!

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