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One primary benefit of incorporating a business is having limited liability.
In a corporation the owners and the business are treated as separate entities. It is wise to maintain the corporation's legal status properly, ensure that all necessary filings and taxes are on time.
Sole proprietors and general partnerships differ from corporations in that the owners are personally liable for all debts and obligations of the business, such as loans, accounts payable, and defective products.
Other potential benefits of incorporating, even for single owner corporations, include:
- Corporate identity: the sense of image, stability, sophistication, credibility, and permanence results from incorporating, no matter if you start with one person or several.
- Raising capital: you can issue stock to investors to raise capital which may be more advantageous than borrowing and making interest payments. A corporation can also issue and sell additional stock.
- Continuous life: a corporation can survive its founders, provided it complies with ongoing state and federal paperwork and pays the annual filing fees. Its shares can be transferred. Often, stock can be pledged, sold, given away, used as security, or given as bonuses.
There are a few ways to obtain a corporation. The first is to incorporate a brand new corporation in the state of your choice. The other is to purchase an existing corporation. Lenders prefer to conduct business with older corporations.
You can contact C&C Capital Lending to discuss purchasing an aged corporation or a corporate kit. This will increase your chances of obtaining credit for your business.
A good place to begin establishing corporate credit is by applying for a business loan on our website, or call Toll Free 866-552-9267. This is one of the steps in enjoying the many benefits of corporate ownership.
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