The Benefits Of Forming A Corporations

Are you considering incorporating your business? A lot of businesses have enjoyed the benefits of forming a corporation. In order to better understand the advantages of incorporating a business, read through this article.

When a business incorporates, the law sees it as a separate entity from its owners. Because of this, the owners then have limited liability over the business. This means that the owners of the corporation (or, the “shareholders” are indebted to the corporation only to the extent of what they invested. Because of this limited liability, creditors are unable to take from the personal assets of the owners of the corporation.

Also, since the law sees it as a separate entity from its shareholders, the corporation has its own Taxpayer Identification numbers, meaning that the corporation pays its own taxes. The shareholders of the corporation pay their own taxes from the dividend that they get from the corporation.

In a sole proprietorship, the whole business ceases to exist upon the proprietor’s death. In a corporation, even if a shareholder dies, the corporation continues to exist. This is called perpetual existence. The shares of interest from the stockholder that died can be transferred to another stockholder. The only time a corporation will stop existing is when the owners choose to merge with another company or decide to dissolve the corporation.

What’s more, incorporating your business will attract more investors. When a business incorporates, it gains a more efficient stock structure and thereby enjoys benefits such as perpetual existence, transferability of shares, and limited liability. This is attractive to investors because it means that they can put more of their trust and confidence in the corporation. The more investors you have, the more capital you can raise. The more capital you raise, the wider your operations can expand.

Last but not least, one of the best things that you can enjoy when you incorporate your business is your new ability to be an employee of your own corporation. Since the law considers the corporation a distinct entity from its owners, the owners can be employees or officers of their own corporation. What’s good about this (besides the dividend you get), is that you can receive salary and compensation like the rest of the employees. This also means that you are eligible to claim reimbursements for expenses made related to your employment in the corporation.

For advice on how to form a corporation Orange County, you need a good local corporate attorney Orange County contracted. Get more information by visiting

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