Why incorporate your business? 

Your business has existed for a reasonable amount of time with you as the sole owner. During that time it has proven profitable and has even defeated its competitors despite the minimal capital input. So why should you incorporate your business at all?

A person who has no knowledge about the benefits of incorporation would probably say there is no reason to incorporate his business considering that it is already proving itself feasible despite is inadequacies in capital and human resources.

However, someone who knows the legal intricacies of business would say otherwise. That person would say that since your business is growing as shown by its earning capacity and market hold, then there is more reason to incorporate it.

A growing business like his should be legally protected because its owners has a lot to lose both ways---he is placed at a disadvantaged whether the business grows and earns profit or whether the business looses and gets liabilities.

Here are some reasons why you should incorporate your business:

1. To protect yourself and your personal assets from liabilities that may be incurred by the business.

2. To get more tax credits and enjoy more tax deductions that would otherwise not be enjoyed if you do not incorporate your business.

3. To give your business a separate juridical personality that is different from the owners.

4. To protect your business by placing it under the mantel or cloak of corporate veil or protection.

5. To expand your business and give it the necessary impetus for growth instead of inhibiting such growth by holding on to it.

6. To lengthen the existence of your company even if something happens to you or to the other owners of the business.

7. To increase the capitalization of your business by getting more investors who will share the profits and will share the losses.

Once you have decided to enjoy these benefits that come with incorporating your business then here are the steps you have to take to make sure that you incorporate your business properly:

• Choose which legal personality you want to give your business. You can choose to make it a general or close corporation, stock or non profit corporation or a limited liability firm.
• Choose a name for your company and have it reserved if possible because another company might register that name ahead of you.
• Make sure that the name you choose does not have the words insurance, university, bank, college or other words that are not legally allowed.
• Decide on the amount of start up capitalization or the number of shares that would be authorised for the corporation.
• The state where you will incorporate your business is also very important since there are states that are more corporate friendly than others. Make sure that you choose a state that would provide the maximum benefits for your business tax-wise.
• File your article of incorporation but not before you have decided on your board of directors or board members depending on the type of corporation you have decided to form.