Did you know 20 percent of small businesses end up failing in their first year? Protect your business and personal assets by incorporating. If you want to learn about the benefits of incorporating, we can help.
In this informative guide, we will go over why you should consider incorporating a business. Starting a business that’s successful means you need to plan for the future.
Want to learn more? Keep reading.
1. You’ll Protect Your Assets
Accidents will occur, and sometimes, businesses will fail.
Business owners choose to incorporate their business so they can protect their assets. A C or S Corporation or an LLC will protect personal assets from business debts.
If you do end up falling on hard times, your personal property will remain off-limits to a collection agency. You won’t lose your home because of failure to pay a business loan.
Personal assets will get linked to your business. Investment accounts, assets, homes, or your car will be obtained. If you file bankruptcy, personal assets could also repay your debt.
2. Protect Yourself From Lawsuits
Keep your family safe and secure when you incorporate your business. If you don’t, your personal assets remain at risk when someone files a lawsuit against your business.
If a customer trips in your store, they could collect damages from you and take you to court.
Someone might try and collect on a judgment against you and take possession of your house. Incorporation will create a barrier between your assets or legal claims.
3. Tax Benefits
Another reason why owners choose to incorporate is because of the taxes.
There are lots of tax deductions available to an incorporated business. When you move from being a sole proprietor to an LLC, you’ll enjoy many deductions.
You can spread out your losses over a significant period. You can deduct operational and startup costs and deduct employee benefits.
Tax laws tend to be complex. State and local taxing authorities might offer incentives when you’re a corporation. You should talk to a certified accountant before you claim a deduction.
4. You’ll Have An Easier Time Getting Capital
Incorporating will make it easier to apply for a loan or raise capital. When you incorporate your business, you can open a business bank account and build a line of credit. Your business will seem way more legitimate.
5. Improve Your Reputation
Your business reputation won’t only get affected by reviews online. When you incorporate your business, you help improve your legitimacy. You’ll build trust with new customers and help you with branding.
Are you ready to build your business or incorporate it? Do you need help with the many aspects of business-building? Talk to a local consultant or visit opstart.ca.
Now You Know More About Incorporating A Business
We hope this guide on incorporating a business was helpful. Consider the many benefits of incorporating and determine if it’s the right choice.
Are you looking for more business tips? Read recent blog posts on digital marketing and employee onboarding.