If you are a business owner, the chances are good that you have thought about incorporating before. It can be an expensive endeavor at first, but the benefits can ultimately make it worth your time and effort. If you aren’t familiar with the concept of incorporating a business, it essentially refers to creating a separate legal entity for your company. We are going to take a look at some of the great benefits of incorporating your business below. Remember that if you are interested in incorporating your business or if you would like to receive expert advice from a business lawyer, you can always reach out to Derryberry & Associates LLP.
Benefit #1 – More Access to Capital
In order to really grow your business, you are going to need access to a lot of capital. By incorporating your business, you will gain more access to capital by issuing shares of stock. Keep in mind that banks prefer to loan money to corporations rather than unincorporated companies. If you are really interested in taking your business to new heights, you should absolutely consider incorporating it. You will gain a lot more access to the capital you need to achieve your business growth vision.
Benefit #2 – Protect Yourself
One of the big things to think about whenever you are starting a business is your liability. You can take advantage of incorporation to protect yourself and your personal assets from liabilities. When you incorporate, you are essentially forming an entirely separate legal entity. That means that creditors won’t come after you personally for the debts of the corporation. Without incorporating, you are pretty much exposed to unlimited liability should debt or legal problems arise from the business. The peace of mind you get knowing that you are protected by incorporating your business makes it an option that you should definitely explore.
Benefit #3 – Tax Deductions
Every business owner knows that with increased success comes increases in tax payments. One of the huge benefits of incorporating your business is the fact that you can claim more tax deductions. The difference can be dramatic as you claim deductions for things like business losses, daily expenses, business investments, and business travel. It’s always a good idea to consult with an accountant before making any big business decisions that can impact your taxes, but the deductions you can get from incorporating are certainly intriguing.
Benefit #4 – Better Business Reputation
A lesser-known benefit of incorporating your business is the idea that you will improve your overall reputation. Corporations are viewed as more legitimate businesses and provide you with larger exposure to the marketplace. People are oftentimes much more willing to invest in a corporation rather than a sole proprietorship or partnership. Incorporating your business can make your company seem more credible and official.
We hope this article has helped you learn why incorporating your business can be a game-changer. Remember to reach out to Derryberry & Associates LLP if you have any questions about business structures like corporations.