What are the benefits of an incorporation? Should you incorporate? These are important questions. Incorporating a business comes with numerous benefits and drawbacks, but while it may not be right for every businesses, it’s a step that should be seriously considered. The main four reasons many businesses owners choose to form a corporate entity are as follows:
- Protect Personal Assets. Separate your personal assets from your company assets. Protect your home, car, and personal bank accounts from attempts to collect business debts.
- Tax Savings and More. Corporations have many tax advantages that individual don't. Save on self-employment taxes, health insurance premiums, and goods and services purchased for your business.
- Access to Financing for Growth Attract investors, partners, and secure loans and lines of credit from banks and other financial service providers.
- Retirement Planning. There are a wide variety of retirement funds and plans that can be created by your business for you and your employees.
A sole proprietorship or partnership may come with a greater sense of personal control, but they both carry the constant danger of personal, financial, or legal disputes. The benefit of an incorporation is that it solves this and other problems.