Most small businesses start out by operating as a sole proprietorship. You may have filed for a fictitious business name (called a DBA in some states) so that no one else can use your business name and you can do things like setting up a bank account in your company’s name. However, there are many advantages to taking the next step and incorporating, especially as your business begins to grow.
3 Reasons to Incorporate
Consider the following 3 benefits of incorporation:
- Protection of Personal Assets – A sole proprietor’s personal assets are tied up with his business. A creditor of the business can seize the owner’s car, home, bank accounts, or other assets through legal means to recover a debt. Incorporating provides a great deal of protection (as long as everything is done in the corporation’s name, no illegal activities are performed, and the incorporating is legally kept up in accord with local laws).
- Protection of Privacy – Corporations only have to list a business address and not a personal address. The owner does not even need to be listed as the registered agent for the corporation. This can provide additional personal information protection.
- Tax Benefits – A sole proprietor is taxed double for social security and Medicare (self-employment tax), but incorporating separates business and personal taxes and protects an individual from this additional taxation.
Why Hire an Attorney to Incorporate?
Will it be better to form your company into an LLC, a C Corp, an S Corp, or any of the other incorporation options? This is an important question to answer. Kaylan Pokala is experienced in all aspects of business formation, from helping you to reserve a business name to incorporation and protecting your intellectual property. Just call 1-844-695-1487 to get started today.