Online Incorporation MaxBlog

The decision to incorporate or maintain your sole proprietorship is one that should not be made lightly. There are a number of advantages to both. And, the advantages really depend on what your unique business and personal needs are.

There are four important things you should consider in your decision to incorporate or not:

• Liability. As a sole proprietor you could suffer a great personal loss if your business is ever sued. Incorporation offers a shield that protects your personal assets in the event your business is ever taken to court.
• Taxes. Corporations usually pay taxes as lower tax rates.
• Investment. Are you looking for investors? The availability of corporate stock makes winning investors easier.
• Cost of establishment and maintenance. Sole proprietorships are less expensive to maintain than corporations. Corporations must pay filing fees and annual registrations with the state.

Be wise in your decision. Get expert advice from your accountant or attorney when making this decision.

Learn more about the different types of business structures and incorporating your small business in the MaxFilings Incorporation Knowledge Center.

A business that has only one owner is termed “sole proprietorship”. The business owner is called a “sole proprietor”. A sole proprietorship is the most simple type of business entity. The requirements for forming a sole proprietorship are less. This usually involves getting a business license, permit, and complying with other state or local business regulations.

Although the structure is simple, liability of a sole proprietor can also be quite a heavyweight. A sole proprietor is “completely” liable all business debts or legal claims i.e the owner’s personal properties or assets can be taken by court order to repay claims or judgements.

As your business expands, a sole proprietor may want to add more owners. This is the time to choose to form other type of business structure. The decisions should be based on factors such as liability, taxation, and the size of the new business expansion. These new types of business structure include: corporation, LLC (limited liability company), or partnership.

More to come on types of business structure….