Future New Business Owners: Incorporation Has Benefits!

A free article on Business

By: Tymon Hytem

While you begin to develop your initial business strategies that embrace the vision you have for your new business venture, do not forget to prioritize your research and decision for the type of business structure you select. There are many options available when exploring a business structure and incorporation has important benefits making it one of your “leading contenders”. These types of decisions should be made after seeking reputable legal advice from a small business attorney or an attorney that specializes in business formation. There will be many facets to consider, and a legal review of your business goals, including both short-term and long- term goals, will help insure that you make the right decision for your legal business structure.

There are numerous benefits to establishing the corporation as the structure for your new business venture. One of the most important benefits is the liability protection that is offered by incorporating. This is commonly referred to as “limited liability”. A corporation is a separate legal entity, completely separate from the personal lives of the shareholders (owners). For this reason, any problems that arise with a corporation through the normal course of business operations, such as debts, creditor claims, or potential customer lawsuits, will be risks that are assumed by the corporation. A corporate structure protects or safeguards “individuals” against business disasters that could negatively affect their personal assets or financial lives. While incorporation does provide this added layer of protection, certain rules and guidelines must be followed to properly maintain the corporation’s legal status. A business formation attorney would provide valuable legal advice in this area.
Another advantage of the corporate structure is favorable taxation. Corporations are often taxed at a lower rate than individuals. Additionally, a corporation can own shares in another corporation and receive corporate dividends that are 80% tax free. More specifics about these tax questions can be covered by a business formation attorney. It is always prudent to seek legal advice and ask all relevant questions about your business structure, particularly when it involves your personal taxation.
Yet another benefit of the selection of a corporation for your business structure is the raising of capital to finance your new venture. A corporation can sell shares of the company and raise necessary funds more easily than other forms of business structures like a sole proprietorship or a partnership. This is obviously a preferred method to borrowing the money and making interest payments. Also should you want to expand your operations or diversify your new business at a later date, and then having a corporate structure in place would allow you to raise these monies by issuing additional stock in the corporation.
Other distinct advantages of a corporation structure over both a sole proprietorship and a limited liability company worthy of mentioning are the concept of “continuous life” (a corporation can survive its founders) and the value realized by the creation of a corporate identity (sophistication, credibility, and a sense of image).
Determining the proper legal structure for your new business venture is a decision that merits seeking legal advice from a business formation or small business attorney. The impact of this decision can be “far reaching” and expert legal counsel would be strongly encouraged. The attorney you retain for this legal matter would also be able to handle the steps involved to properly setting up your corporation.

Information about the Author:

John M. Adams has worked as an attorney for the past 20 years. He has helped many small businesses achieve their goals in the most efficient and cost effective way possible. If you are looking for a www.seattlebusinessattorneyjohnadams.com/ "> Seattle Business Attorney or a www.seattlebusinessattorneyjohnadams.com/firm.htm "> Tacoma Business Attorney , you need not continue your search.

Business Articles: http://www.article-buzz.com

Print This Article
Add To Favorites
Email to Friends
Get Re-print Code