If you’ve been waiting for the right moment to incorporate your company, this could be it. Here’s how to do it in three simple steps.
What you’ll discover:
Safeguard your personal valuables.
Make the most of tax breaks.
Develop your company for the future.
Small company owners have spent the past year riding the pandemic’s ups and downs, hoping for what we all hope is a post-pandemic boom of economic strength. Although some small firms were forced to shut their doors permanently, others were able to continue in business by using government loans and other forms of aid.
After the first shock of COVID-19 shutdowns, new company applications and formations skyrocketed in the later part of 2020, and early 2021 patterns appear quite similar. Incorporations are increasing, which is understandable given the potential advantages. If you’ve been waiting for the right moment to incorporate your company, this could be it.
Incorporating may have a significant influence on your firm. Whether your company is still trying to find its feet in the thick of the epidemic or has recently set a new sales record, incorporating may benefit any company, large or small. Here are some advantages of incorporating:
Table of Contents
Safeguard your personal valuables.
There is always the danger of liability while conducting business. Assume you own a restaurant. If your company is not incorporated, your personal assets are inextricably linked to your company in the eyes of the law. If someone is injured at your restaurant, they may be entitled to sue you and your company. Additionally, since there is no distinction between your personal and corporate assets, your personal assets, such as your vehicle, house, and money, may be at danger.
Even if your company does not involve physical injury, there are other scenarios that might place you in jeopardy if you are not incorporated. In the end, it’s a better idea to incorporate to protect yourself and your personal assets and prevent a possibly big legal tangle.
Make the most of tax breaks.
You may normally take a salary, avoid a higher tax rate if you’ve been operating as a sole proprietor, deduct company-related expenditures and losses, and more depending on the business structure you pick. What happened to all your new office supplies? You may be eligible to deduct such expenditures on your taxes if they comply with IRS standards for business deductions.
Develop your company for the future.
Did you know that after you’ve incorporated, you may get loans from banks and lenders far more readily than if you hadn’t? What does this imply for your company? It implies that your company can position itself for success and have more cash to flourish. That additional cash cushion might help you recruit the appropriate people and stay competitive in your business.
Moreover, whether you incorporate as an S-Corporation or C-Corporation, you may sell stocks. This provides you with an additional source of money. Selling stocks may attract investors who can provide funding and direction as you expand your firm in the future.
If you want to make this year better than previous, why not include incorporation as one of your goals? We can assist you with incorporating right away.
1. Quiz on Business Structure
Not sure which business structure is appropriate for you and your company? No worries. Just complete this company structure questionnaire to see which entity is best for you. The suggestion tool will study and compute the best entity for you based on your replies. It simply takes a few of minutes.
2. Consult a Lawyer
If the whole procedure seems to be daunting, you may speak with one of our incorporation consultants or ask a lawyer a question. Every year, our incorporation professionals assist hundreds of firms in forming and can answer any concerns you may have regarding the process. We also have attorneys that specialize in incorporation.
3. Implement
After you’ve determined the proper entity for your company,
