Top Reasons You Should Incorporate Your Business

Incorporating your business is a very crucial decision one can make because it affects many aspects of your business.

However, establishing a business corporation has its pros and cons depending on the nature of your business. There are two major types of business incorporation: The C corporation is a very big corporation that normally consists of more than 75 shareholders, and the S corporation consists of no less than 75 shareholders.

The C corporation has no limit on the number of shareholders, which can range from 75 to unlimited, whereas the S corporation is much smaller and can only accept 75 shareholders.

Almost all businesses can be incorporated as long as the resources are available. The procedures and steps involved in forming a business corporation are applicable to almost all business entities. Also, the costs depend on the nature and type of business.

Why Should You Incorporate Your Business?

There are many reasons why you should incorporate your business and these are described below in detail.

  1. To Protect Your Wealth

The main reason most business owners incorporate is to protect their personal wealth. When a business is incorporated, a different legal entity is formed. This means your business can amass wealth and debt separately, i.e., differently from your own private assets and debts.

Also, incorporation of your business helps to reduce liability. Imagine your business getting sued by your creditors. The risk of losing your car, house, or other assets is reduced compared to a sole proprietorship because he bears the risk alone and any issue affecting his business directly affects him.

  1. To Lower Taxes

Despite the fact that many corporations are frequently subjected to double taxation.

There are several other taxes that make incorporating your business worthwhile. Let’s say your corporation has lots of employees. You will be able to write off health benefits costs.


Your incorporated business is prone to an unlimited sum of operational losses. Bonuses, salaries, advertising costs, and operating expenses are considered, resulting in tax deductions.

  1. Extensive Lifespan

A sole business may cease to exist when the owner dies, but a business corporation rarely ceases to exist. In fact, it can last for decades, centuries, and generations to generations even after the person that founded the business passes away.

A good example is the Apple company, founded by Steve Jobs and his friend. Despite Steve’s death, the company has not ceased to stop growing day by day and is now the richest in the world.

  1. Credits to Your Company

 Most customers and clients tend to favorably trust corporate companies over any other business start-ups due to their status.

Incorporating your business makes your business look more legitimate and professional to customers and clients.

5.Raising Funds

When your business is incorporated, it’s way easier to raise funds for the expansion of your business. Also, getting loans from the financial institution becomes easier than if you were the sole proprietor.

Corporate companies are the only business organizations that issue stock. They may issue some stocks for sale in order to get capital to finance different ventures or pay off the company’s debt.

Final Thoughts

Business incorporation is very good but has its pros and cons. And one of them is that you, being the founder, won’t have full control of your business. The positive side is that your business is separated from your personal life and anything affecting the business won’t affect you personally.

By 12disruptors Admin

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