Business Incorporation

Why should I incorporate my business is a common question asked by small business owners.  It's often a crital early erro that young start ups make when they get the business up off the ground.  Business owners get so involved with the business that they do not sit back and think about the reasons they need to create a formal legal structure for the business.  Whether your business is small or large all companies will benefit by incorporating or forming a LLC (Limited Liability Company).

The Advantages Include:

 

  • Deductible Business Expenses - LLC's and Corporations may deduct business expenses such as salaries, rent, and equipment before income is taken by the business owners.
  • Tax Benefits - Profit and loss typically pass through an LLC and get reported on the personal income tax returns of owners, an LLC can also select to be taxed as a corporation. A corporation can avoid double taxation of corporate profits and dividends by electing Subchapter S tax status.
  • Perpetual Existance - LLC's and Corporations continue to exist even if ownership changes.  Sole Proprietorships and Partnerships end if the owner dies or decides to leave the business.
  • Exclusive Name - The name of the business is protected if the LLC or Corportation are formalized.  No one else can use the same name in the same state.
  • Protected Personal Assets - This may be the biggest benefit of all.  When you form the LLC or Incorporate your personal assets are protected.  This allows the business owner to seperate personal finances from business finances.

Its your choice and is completely up to your business an personal goals.  As long as you form either structure your personal assets will be protected.  This will allow you to conduct business without the constant worry that your house, car, or other assets are at risk.  Another nice feature is that incorporating or forming an LLC is cheap.  In most states you can have the process done for under $500 and no attorney is needed.  Online applications are provided on most states secretary of state webstites and they whole process can be completed in 7 to 14 days.  Several online incorporating companies also offer the same service for a very small price.  If you interested in forming your corporation or LLC now click here.

 

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