Starting a business involves making many critical decisions. Let the professional help you make informed decisions and handle all the paperwork for you. Following are some of the benefits of incorporating:
Limit the personal liability: Properly forming and maintaining a corporation will provide personal liability protection to the owners or shareholders of the corporation for any debt or liability incurred by the business. So creditors can’t pursue your home or car to pay business debts.
Bolster business credibility: Having INC.,CORP. or LLC after your company’s name adds a touch of professionalism and credibility to your business dealings. Consumers, vendors, and partners may prefer to do business with an incorporated company.
Facilitate fund raising: When you’re looking to raise money through investment or borrowing, an incorporated company can actually make funding easier. Capital can be raised through the sale of stock or member ownership. And many banks prefer handling loans with incorporated borrowers.
Take tax advantages: Business profit and loss typically pass through an LLC or S Corporation and get reported on the personal income tax returns of owners. LLC members can take special allocation of business income or loss. While the shareholders of S Corporation can avoid the self-employment tax on the profit distribution.