MEMORANDUM OF UNDERSTANDING / REF / 2 / 2014

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BUSINESS REGISTRATION / REF / 3 / 2014

             

         

                  How You Can Benefit from a Corporation

There are many benefits to incorporating your business regardless of its size. Advantages of forming a corporation or Limited Liability Company (LLC) include:

• Personal asset protection. Both corporations and LLCs allow owners to separate and protect their personal assets in the event of a lawsuit or claims leveled against a business entity. In a properly structured and managed company, owners should have limited liability for business debts and obligations. This remains one of the biggest benefits to incorporating.
• Additional credibility. If you were to list one or two of the chief benefits of incorporating your business, one of the top reasons would be the instant credibility afforded your businesses following incorporation. Adding "Inc." or "LLC" after your business name can add instant authority. Consumers, vendors, and partners may prefer to do business with an incorporated company.
• Name protection. In most states, other businesses may not file your exact corporate or LLC name in the same state. Not only can this help protect your company's reputation from being diminished by or confused with another company with a similar sounding name, but this is also one of benefits of incorporating that aids your business in terms of name-recognition, marketing, and branding efforts.
• Perpetual existence. Corporations and LLCs continue to exist even if ownership or management changes. Sole proprietorships and partnerships just end if an owner dies or leaves the business. Forming a corporation ensures that your company's legacy can remain, as well as continue to provide employment and services for clients should any changes in ownership occur.
• Tax flexibility and incorporation tax benefits. There are several tax advantages and benefits of incorporating a small business. Though profit and loss typically pass through an LLC and get reported on the personal income tax returns of owners, an LLC can also elect to be taxed as a corporation. Likewise, a corporation can avoid double taxation of corporate profits and dividends by electing Subchapter S tax status.
• Deductible expenses. Both corporations and LLCs may deduct normal business expenses, including salaries, before they allocate income to owners.

The decision to incorporate is an important step in the life of a business. Weigh your options carefully, consider the advantages and disadvantages of incorporating a small business, and further investigate some of the added benefits of incorporation.

Should My Business Incorporate or Form an LLC?

Corporations and LLCs are both separate legal entities (business structures) that enjoy certain protections under the law and important benefits. Most people form a legal business structure to safeguard their personal assets.

The benefits to incorporating or forming a Limited Liability Company (LLC) allow you to conduct your business without worrying that you might lose your home, car, or personal savings because of a business liability.

Form a corporation or LLC today to protect your personal property and save on taxes. Or, try our Business Startup Wizard to see what other business owners in your industry and state have done. Our helpful tools can better help inform you and your decision as to whether or not to incorporate right now.

Decide Which Business Structure is Right for You

Quickly view the differences between corporations and LLCs in our Business Comparison Chart. Or, read more details about all types of business structures to decide what's right for you and if it is in your business's best interest to incorporate right now.
 

 

 

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