subject: Why Incorporate Your Business? Here Are The Facts [print this page] If you are thinking about starting a business you may ask the question, why incorporate? Incorporating your own company has its advantages, but it is still your own choice whether you will proceed with the incorporation or not.
Incorporating your own business will reduce the taxes that you will have to pay, one advantage that you will
certainly enjoy. Normally, the tax rate for an incorporated company is much lower than that of the individual, and the corporation is being taxed separately from its owners. One thing you must remember is that your company must first earn a specific amount before you benefit from a reduced tax rate.
An incorporated business also has a better access to capital. Banks and other financial institutions can generally allow them to borrow money at a much lower rate. The reason for this is because it is considered less risky than loaning money to other types of businesses. Another advantage is that an incorporated business can raise money easily while the other types of businesses have to rely solely on their own resources.
A corporation's shareholders can also benefit from this process. 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. Should the company become bankrupt, the investment made by the shareholders upon the forming of the company is protected and they could not be sued directly by the creditors.
Should you still need further convincing on the benefits of incorporation, here are other advantages. Incorporating your company has greater stability than other types of businesses such as partnerships and/or sole proprietorship. Unlike other types of businesses, an incorporated company does not cease to exist in the event any or all of its owners, directors or shareholders should die. The reason for this is because the ownership of a corporation is not dissolved upon the death of its owner, shareholder or director, but is transferred 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. There a number of providers which specialize in the preparation of ready made companies for sale. This will take the hassle out of having to incorporate a business as it is all done for you; you simply have to complete the ownership transfer process with the supplier.
There is a benefit in choosing a ready made company with a history. A much older company exudes more prestige. The companies are already registered saving you time and money. Several factors determine the cost of these ready made companies.
All the details above will assist you as you ponder on the question, "Why incorporate?" Making the decision to incorporate your company should not be taken lightly and all pros and cons should be explored before deciding completely. For additional information to assist you in making that life-altering decision, type "why incorporate".
