Do you think you're ready to take your Business to the corporate level? Following are some important considerations if you are unsure about moving forward:
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- You're looking for investors — incorporation may show you're serious.
- You plan to expand your business to another state — incorporation can help you address cross-border issues.
Consider the many advantages corporations offer:
- Unlike proprietorships and partnerships, the life of the corporation is not dependent on the life of a particular individual or individuals. It can continue indefinitely until it accomplishes its objective, merges with another business or goes bankrupt.
- Transferability of shares means that the ownership interest can be readily sold, transferred or given away to a family member. With corporations, all of the individual owners' rights and privileges are represented by the shares of stock they hold.
- Corporations have a reliable body of legal precedent to guide owners and managers.
- As a business owner, you will be responsible for additional record-keeping requirements and administrative details.
- Operating as a corporation can create an additional tax burden.
- Corporations require annual meetings and owners and directors to observe certain formalities.
- Corporations are more expensive to set up than partnerships or sole proprietorships.
- Corporations require periodic filings with the state and annual fees.
Corporation | Incorporating a Business |
Corporate Business Formation | Corporation Legal Structure |
Incorporate a Business
This post first appeared on Growth, Profits, & Wealth Blog By Travis Raml, CPA, please read the originial post: here