There are so many benefits to incorporating your business and doing so now rather than waiting until the end of 2007 or beginning of 2008 will provide even more. Here is a list of the top reasons anyone should incorporate with a few added reasons why you need to do so now.
Reduce your personal liability. But operating your business as a sole proprietorship or general partnership you putting all of your personal assets at risk for the actions of your business. For example, if something goes wrong in the business and a creditor isn't paid, they can go directly to you personally and ask for the money. If you can't pay, they can force you to sell off assets. The same is true in case of a lawsuit where a judgment is filed against your business and with the odds of a lawsuit so great you don't want to leave your personal assets at risk.
Establish credit in the business name only. By setting up a Corporation or LLC you have the ability to set-up a separate business credit profile from that of the owners and officers of the business. The owners will not have to rely completely on their personal credit when seeking credit and loans.
Save on taxes. There are several deductions and tax strategies available to a Corporation and LLC that are not for the sole proprietorship or general partnership. Work with your CPA to develop the best strategies for your individual situation. If you have a CPA that says you shouldn't incorporate, I would suggest interviewing other CPAs. I have heard of CPAs telling small business owners that they don't need to incorporate and I was able to show that same client how they could have saved $25,000 in taxes the previous year.
Your business is more credible. By adding an Inc. or LLC after your business name it implies that your business is larger and more knowledgeable.
Attract Investors. Investors don't want to pour money into a sole-proprietorship or general partnership. They wouldn't have shares in the company, they would be personally liable for the business and they don't have something easy to sell when they want out. A Corporate structure has stock that is easily transferable and investors feel from comfortable when investing in a legal structure, such as a corporation or LLC.
Transfer ownership easily. You can transfer ownership with a corporation or LLC with a simple sale of stock.
Age of the Corporation. By incorporating in 2007, your business becomes one year older in just one month. If you wait to incorporate in January of 2008, you will need to wait 12 months before you are a year old. Many credit grantors and applications ask for the year of incorporation not the month. So if you are a December 2007 corporation, in March of 2008 you are not three months old but rather 1 year in the eyes of many credit grantors. In addition, in 2 or 4 years from now you will tell people that you started your company in 2007, not December of 2007. So you are now 3 or 5 years old.
Busiest time of the year. December is the busiest month of the year to incorporate. If you wait until the last minute you may end up getting a January 2008.
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You will also learn the first steps required to getting a business loan, lease, and other lines of credit without the use of a personal credit check or guarantee.
Article Source: http://EzineArticles.com/?expert=David_Gass
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