While Thanksgiving has passed and 2014 is coming to a close, there is still much to be thankful for if you’re an entrepreneur or have an incorporated business. Below is a sampling of some of these reasons.
- Security that your personal assets are safe
If you own a sole proprietorship, your personal assets (including your bank and retirement account(s) and your home) could be depleted to pay legal fees if you’re involved in a lawsuit. An incorporated business, however, keeps any and all personal assets separate from business assets. This keeps your personal accounts safe in the event of a suit.
The ability to put “Inc.” after your business’s name can not only make you have a greater sense of professionalism, but it can straight up make you feel more powerful. That said, you’re not required to add “Inc.” to your business. Even then, just the thought that you are incorporated can give you the feeling that you’re a ‘real’ business owner. Moreover, your new status can encourage your customers to be more serious about working with you.
- Less stress during tax season
Owning an incorporated business means that you can file all of your taxes at once (thank you, pass-through tax!) instead of having to file your personal and business taxes separately. Some incorporated businesses are also eligible for tax savings, so you may end up paying less in taxes, too.
- Incorporations have staying power
If you want your business to thrive and be something you’d like to pass onto your kids one day, incorporating your business will make this process simple due to a corporation having an unlimited lifespan. As long as the business can operate, it will operate; moreover, it can easily pass to a new owner if you’d like to retire.
- Your business’s credit is separate from your own
Having an incorporated business allows you to build its credit, borrow funds and even raise capital by selling equity. Typically investors would rather work with (and invest in) corporations due to limited liability and easy investment transfers. Being incorporated makes easier to attract investors.
Making the decision whether to incorporate your business can require you to put in a great deal of thinking. Perhaps this list can help give you the tools you need to make the decision whether you should incorporate; as well as, showing you the benefits that come along with it. If you need more help making your decision, contact MaxFilings. You can also find more information on our Knowledge Center.