Why do businesses incorporate

Depending on which corporation type you decide is right for you, there is some flexibility on where you incorporate. Most people incorporate their business in the state where they live and conduct most of their business. However, many owners have found incorporating in another state to be better for their bottom line. Celebrate Small Business Month! New Order?

Existing Order? Toggle navigation. LLC More Learning Center Start-up Tasks Corporation vs. Raising capital is generally easier for a corporation, since a corporation can issue shares of stock. This may make it easier for your business to grow and develop. In most cases, banks would rather lend money to corporations than to unincorporated business ventures.

Corporations generally have access to more alternative sources of capital through which they can pay off their debts. The benefits of incorporating go beyond finances. Suppliers, customers and business associates often perceive corporations as being more stable than unincorporated businesses. Corporations are the most enduring legal business structure. A corporation can continue indefinitely, regardless of what happens to its individual directors, officers, managers, or shareholders.

This means that by incorporating your business, you may be able to avoid the legal entanglements that could result with other business structures. A corporation can offer anonymity to its owners. The tax rate for Federal Income Tax is lower for corporations than it is for individuals. In addition, corporations may be eligible for many tax deductions not available individuals or partnerships. With CorpNet, the cost of incorporating is affordable.

In most states, incorporating a business does not require costly attorney fees. In fact, YOU can visit the state office and file articles of incorporation yourself. Note: There is no replacement for sound legal advice. If you can afford an attorney and you feel you would like advice on what solution is best for your particular circumstances and additional benefits of incorporating your business, please contact a licensed attorney in your jurisdiction.

Stay Signed In. Create Account Forgot Password? The Benefits of Incorporating a Business. Incorporate or Form an LLC. Get Started. Perpetual Life for the Business A Corporation is a separate legal entity with an existence of its own and a perpetual life. Transferability of Ownership A sole proprietorship does not have a life apart from its owner and it may not be transferred to a third party.

Ability to Build Credit and Raise Capital Because a corporation is a separate legal entity with its own tax identification number similar to a social security number for an individual a corporation can build credit, borrow money and sell equity to raise capital.