If you are going into business for yourself, you would be wise to consider forming a corporation. A corporation is a legal entity completely separate from its owner that is used to operate a business. When properly formed and managed, a corporation offers its owner several benefits, including:
Limited Liability From the Creditors of the Business
In other words, people who you do business with through the corporation cannot take your personal money and assets away from you to pay for business debts. This limited liability protection is essential when going into business because often times your business will take risks that you are personally unwilling to take.
Tax Advantages
A corporation also provides you with certain tax advantages. As your CPA will tell you, small business owners who operate their businesses through corporations have much greater flexibility in their tax planning than individuals who operate their businesses as sole proprietorships. As a small business owner, you are also able to avoid federal corporate tax liability by forming a S-corporation. This gives you even greater flexibility in your tax planning.
Professional Appearance
Often times, other businesses will be reluctant to do business with an individual doing business as a sole proprietor. As a corporation, you will separate yourself from the pack and show others that you are professional and that you take your business seriously. Having “Inc.” or “Corp” after your business name may be just what you needed to close that lead you were pursuing. This may help you increase your sales and grow your business.
There are many benefits to forming a corporation, including:
- Limited Liability;
- Tax Flexibility;
- Professional Appearance.
These are just a few of the benefits. Contact a Tailored Legal attorney today to learn about these benefits and more, and to form your new corporation.
