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Wednesday, November 30, 2011

Thinking of adding “Inc.” to your business name? Want to incorporate your business?

Thinking of INCing your business?
Thinking of adding “Inc.” to your business name? Want to incorporate your business?
In general incorporating your business can provide the business owner the following advantages:


Sole proprietorship and partnerships are subject to unlimited personal liability from a judgment arising out of a business debt. Which means, creditors can and will hold the business owner personally liable for debt. If the creditor is successful in obtaining a judgment that can enforce the judgment by seizing or garnishing your personal property such as a home, savings, or other personal assets. The most common way to protect your personal assets from business-related lawsuits is by incorporating your business. No matter the size of your business, it’s worth investing in your business to protect your personal assets. Please take note that incorporation by itself is not sufficient to protect or isolate your personal assets, there are other formalities that must be followed to secure the protection that is offered by incorporating your business.

It is advisable that you contact your local small business attorney before deciding if incorporation is right for your business.

Did you know that a judgment that is awarded against you in favor of a creditor can devastate your personal credit score? Even a small judgment can have major impacts on your credit score. This is another important reason to incorporate your business.

Incorporation can offer some tax advantages. The advantages depend on many factors such as whether the corporation elects to be taxed under subchapter "S" or "C" of the Internal Revenue Code.

Another huge advantage to incorporation is that a corporation “lives forever.” Meaning if a sole proprietor dies the business generally “dies” or ends with the death of the proprietor.

Generally, as a business entity corporations are easier to market and sell to an investor and usually more attractive to buyers than a sole proprietorship.

Incorporation may enhance the “image” of your business by increasing your credibility and prestige in its dealings.

A corporation can offer anonymity. For example, if a business owner wants to have a small business without causing their identify to be public knowledge, the best choice is to incorporate.
Raxter Law is a law office concentrating on the needs of Small Business. If you have any questions contact Raxter Law at (951) 226-5294.

1 comment:

  1. It would be really great to make it like that. That way it would be easier for others to understand it quickly if the learning method would be universal in some form or something that has a standard.


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