By Shannon Stahlin, CEO, Direct Incorporation
Don’t take a wrong turn when starting your journey as a business owner. To properly protect yourself and your assets, you must incorporate your business. Whether you’re a Limited Liability Company, an S-Corporation, or a C-Corporation, incorporating your business offers you the following benefits:
1. Protect your personal assets. When you incorporate your business, you’re essentially forming a separate legal entity. This means you are limiting your personal liability should there be a lawsuit filed against your business.
2. Lower your taxes. When you incorporate your business, there are tax deductions for a wide variety of operating costs, which will substantially cut back your company’s overall tax liability. These deductions may include the cost of materials, employee wages, the cost of insurance, the cost of retirement plans, as well as business travel and entertainment expenses.
3. Raise your capital. A corporation can raise capital from investors easily through the sale of stock, while a sole proprietor cannot.
4. Leave a legacy. The life of a corporation is not dependent on the life of a particular individual. It can continue indefinitely and is not affected by the death or withdrawal of shareholders, directors or officers of your corporation.
5. Enhance your image. Another essential reason to incorporate your business is that it adds credibility to your operation. The perception of a business is improved by its incorporation and use of “Inc.,” “Co.,” or “LLC” following the name of the business. Customers are more likely to trust and deal with a business that has this positive image. More importantly, your business will be more attractive to banks and investors if and when you seek outside financing.
Do you have questions about incorporating? Please leave a comment below and I will try to answer them. Thanks! – Shannon