As a business attorney, I’ve helped scores of entrepreneurs through the process of incorporating their businesses. Our first step is to consider the benefits of forming a corporation and discuss whether this is the right course of action for them.
In this month’s newsletter I briefly describe eight of the biggest advantages to incorporating a small business. How many of these potential benefits are important to you?
Tax flexibility and tax benefits:
Incorporating your business will provide you with a variety of tax deductions, including deductions for: health insurance, life insurance, and savings on self-employment taxes. By choosing an LLC, s corporation (s corp), or c corporation (c corp), you have the freedom to decide on a tax structure that works for your business. Tax laws, however, are complicated. In determining which business structure is right for you, turn to professionals to understand the legal and tax aspects of your choice.
Financing and raising capital:
Some lenders prefer that you are incorporated before they'll advance you money. When you incorporate your business, it's responsible for paying back the loan and the lending institution won't have to look to you personally. You're also not personally liable for the debt.
When raising capital, it is usually much easier to attract new investors into a corporate entity because of limited liability and the easy transferability of shares.
Corporations are the best vehicle for eventual public companies:
If you are an entrepreneur who “thinks big” – you might be looking down the road to bringing your company public eventually. If this is your vision, you will want to incorporate from the beginning.
If any of these advantages are important to you, an experienced business attorney can help you consider your options and determine what best suits your goals, objectives and risk tolerances.
For more information on how to legally protect your business please pick up a copy of my bestselling book: ‘Go Legal Yourself’ on Amazon or visit my website at GoLegalYourself.com.