subject: Company Incorporation Advantages And Why You Should Incorporate Your Business [print this page] If you plan on starting your own business, you might ask: Why do I need to incorporate? Incorporating your own company has its advantages, but it is still your own choice whether you will proceed with the incorporation or not.
The first advantage of incorporating a business is the reduction in taxes that you will have to pay. In general, the tax rate for an incorporated company is lower than the tax rate imposed on an individual, and the tax imposed on the corporation is separate from the tax imposed on its owners. You have to bear in mind that your company must first earn a specific amount before you can enjoy the benefits of a lower tax rate.
Another advantage of incorporation is that an incorporated company has a better access to capital. They can readily obtain loans from banks and other financial institutions at a much lower rate. This is due to the fact that loaning money to an incorporated company is less of a risk than loaning money to other types of businesses. Corporations also have the advantage of being able to raise money more easily than other types of businesses, which have to rely completely on their own money.
This incorporation process also gives benefits to a company's shareholders. The liability in a corporation is limited to itself only such that its shareholders do not have to be responsible for the company's debts. In the event that the company goes bankrupt, the shareholders' investments upon the forming of the company are being protected and they could not be sued by the company's creditors.
Still asking the question, "why incorporate?". Incorporating your company has greater stability than other types of businesses such as partnerships and/or sole proprietorship. In case the owners, directors or shareholders of an incorporated company die, the corporation does not cease to operate unlike other forms of businesses. This is due to the fact that upon the death of a corporation's owner, director or shareholder, the ownership of the corporation is passed on to their respective heirs. The ownership transfer of a corporation is also a very easy process.
If you find the process of incorporating your business very tedious, you can have the option of buying off ready-made companies. A number of providers which specialize in preparing ready-made companies for sale are available to assist you. This way, you will not have to go through the intricate matters of incorporation; you just have to complete the process of transferring the ownership with the supplier.
There is a benefit in choosing a ready-made company with a history. The older a company is the more prestigious it will appear to be. You can also save time and money because these companies are already registered. Several factors determine the cost of these ready-made companies.
Based on all the foregoing, you may now ponder on the question. "Why incorporate?" Before making the final decision on whether to incorporate your company or not, you should take all matters seriously and weigh all the pros and cons. If you need some more information, typing why incorporate " will bring up an abundance of information for you to read in order to make that life changing decision.
