A corporation is a legal entity that is granted certain powers by the state. It is owned by shareholders who share in the profits and losses of the corporation. It is guided by directors that act sort of like a legislature and decide important business decisions on a periodic basis. These decisions are carried out by the president of the corporation and the other officers such as the secretary and treasurer. There are many advantages to incorporating.

When you incorporate, you are protecting yourself from personal liability. You will also be able to immediately take advantage of the tax system. Incorporating enables you to make use of a marketing framework and this in turn makes it a lot easier to raise capital & establish corporate credit. A Corporation may also take advantage of state laws that grant it privacy. Certain states allow a Corporation to be set up such that the shareholders remain anonymous, and many times, the same anonymity can be accomplished for officers, or directors. In most states, the officers and directors are disclosed, however, shareholders remain anonymous. Finally, a corporate structure can result in an easier transfer of ownership when it comes to various assets.

The most important reason to incorporate is to protect yourself from personal liability. When you incorporate, you are forming a legal entity that is separate from yourself as an individual. The Corporation has powers vested upon it that allows it to make all the decisions that an individual may make. For example, the Corporation may enter into leases, the Corporation may borrow money, it may buy goods and services on credit, and in all cases you are not personally liable for the transaction. If a problem arises, the only recourse would be against the Corporation, similarly, if anyone were to ever file a lawsuit for an action arising out of the business of the Corporation, that party would not be able to go after your personal assets such as your home, or car or boat etc., as long as you comply with the formalities of a Corporation. Therefore you have the peace of mind knowing that your personal assets are safe.

In a corporate structure you can take what otherwise would be non-deductible personal expenses and turn them into legitimate deductible business expenses. In this area there is really no limit as to what you can accomplish with a little creativity. For example, it is well within reasonable grounds to have your annual corporate meeting of shareholders and directors in a far away "resort city" and deduct the expenses as a corporate expense.

Incorporating enables you to make use of a marketing framework. You have the ability to hold the business out to the public as a Corporation. Corporations are usually viewed as bigger and more powerful operations than say "John Doe down the street". This is particularly useful when you are trying to attract investors and raise capital so that your company grows. The fact that your business is recognized as a Corporation gives it immediate credibility in the eyes of potential venture capitalists and other providers of funds. This also holds true for establishing or reestablishing credit. If you have had prior credit problems on a personal level, it will not prevent you from establishing good corporate credit once you have completed the incorporation or organizing process.

Privacy is also a great advantage to incorporating. In most states, the shareholders of a Corporation are not disclosed and therefore are not public record. It is possible to set up your Corporation in such a way that your involvement in the corporation is never revealed. This does not hold true if you are filing an assumed name or DBA as a sole proprietor or partnership, wherein the names of the parties are disclosed on the assumed name or fictitious business name statement.

A great benefit of incorporating is the ease of transfer of ownership when it comes to assets owned by the Corporation. For example, if you own real estate, by putting it into the Corporation not only do you protect that asset from your personal creditors but if you needed to transfer that property to someone else, you could do so simply through a private agreement such as a stock transfer agreement, rather than go through a formal real estate closing. The stock transfer agreement would transfer ownership interest in the Corporation from you, to the person you are transferring to, and since the real estate is already a corporate asset, you are effectively transferring your interest in that as well.

We understand that the process of Incorporating Online involves some research. We recommend that you Bookmark Our Site, or submit your email address and we will send you a friendly reminder about our site. When you are ready to incorporate or form a limited liability company, you will want some one on your side that can answer all your legal questions plus provide quality service at an amazing price!We depend on our clients to SPREAD THE WORD about our professional legal services and our affordable prices. If you know some one that may be interested in our services, CLICK HERE.

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STARTING A BUSINESS

There are many benefits to starting a business and incorporating. Some of the benefits of starting a business include protection of your personal assets, ease of raising capital, gain anonymity, available tax benefits and more!

Material presented on AmeriLawyer.com is intended for information purposes only. It is not intended as professional advice and should not be construed as such. The U.S. Treasury Department requires us to inform you than any information obtained from this website is not intended or written by our law firm to be used, and cannot be used by any taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code. Advice from our firm relating to Federal tax matters may not be used in promoting, marketing or recommending any entity, investment plan or arrangement to any taxpayer.

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