Advantages of Incorporating
by Janet Attard
There are many advantages to incorporating your business.
The primary benefits of operating under a corporate form generally revolve around tax and marketing considerations and ease of attracting investors. In real life, while the benefits of incorporation may technically be available to a business of any size, in practice very small businesses may gain little or no benefit by incorporating until they have employees or can reap tax benefits by incorporating.
That said, these are the potential benefits of the corporate form of business:
- You may be able to raise capital more easily as a corporation than as a sole proprietor; however, there are no guarantees.
- It may be easier to transfer ownership in a corporation than it is in a sole proprietorship or a partnership.
- Under some circumstances your tax rate might be lower.
- If you have employees, incorporation may protect your personal assets if an employee does something that causes the company to be sued.
- You may be able to give yourself more company-paid fringe benefits as an employee of your corporation.
- You may be able to get and keep good employees by offering them stock in the company.
- You may gain estate-planning benefits.
- You might find incorporation preferable to a partnership if you will be going into business with one or more other people.
Incorporate your business the easy way:
Copyright 1993, 2000, 2004, 2016 by Janet Attard. All rights reserved.
About the author:
Janet Attard is the founder of the award-winning Business Know-How small business web site and information resource. Janet is also the author of The Home Office And Small Business Answer Book and of Business Know-How: An Operational Guide For Home-Based and Micro-Sized Businesses with Limited Budgets. Follow Janet on Twitter at http://www.twitter.com/JanetAttard.