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Why should I Incorporate ?

 
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Category : > Corporation
Posted On : Wed Aug 26th,2009

 
Incorporate Business For Your Assets Protection Today!
 

What is the reason to incorporate a business?

Incorporating is one of the best ways a business owner can protect his or her personal assets. Most people choose to incorporate solely for this reason, but there are other advantages as well. For example, the corporate business structure saves you money in taxes, provides greater business flexibility, avoids audit chances, better itemization and lets you more easily raise capital.

There are many advantages to incorporate your business. Liability protection of your personal assets is one of the primary reasons why a small business will form a corporation. Incorporating helps to separate your personal assets from that of your business. A corporation is a legal entity that exists separately from its owners or shareholders. Typically, shareholders are not liable for the debts and obligations of the corporation or from any litigation where the corporation is the defendant in most cases. In a partnership or sole proprietorship, the creditors can go after the owner's personal assets if the company assets are not enough to settle a claim in most cases.

In company registration or corporation formation, prospective shareholders exchange money, property, or both, for the corporation's capital stock. A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income. A corporation can also take special deductions for federal income tax purposes; a Corporation is recognized as a separate taxpaying entity. Corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders.

The profit of a Corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This creates a double tax. The corporation does not get a tax deduction when it distributes dividends to shareholders. Shareholders cannot deduct any loss of the corporation. 

 

  


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Comments (13)
raul montoya   wrote on : Thu Sep 03rd,2009
IAM A GENERAL CONTRACTOR(SOLE PROPRIET) MY PERSONAL CREDIT IS BAD,IF I MAKE A CORPORATION IS MORE EASY TO HAVE A CREDIT?
InfoTaxSquare.com   wrote on : Fri Dec 04th,2009
Sorry Raul Montoya, I would suggest you to please check with the financial institute, because our services are limited to taxation and business formation. Thanks for choosing Infotaxsquare.com
caroline johnson   wrote on : Wed Jan 27th,2010
assisting my Dad with his new business venture and need more info on the time frame involved in incorporating a business
Reply : infotaxsquare.com
 

Caroline Johnson,

Thanks for choosing InfoTaxSquare.com for your business needs. We need additional information to advice you properly.

  • Which state do you want to register your business? and
  • What sturcture LLC, corporation or dba (sole proprietor).

You can either eemail or call us at 516.822.3100.

Thanks,

Documents Filing

Department!



Janice   wrote on : Wed Feb 10th,2010
Is the S Corp also a seperation of business and personal assets? Thanks
Reply : infotaxsquare.com
 
Dear Janice: Yes, It is separate entity.

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bryan   wrote on : Tue Feb 16th,2010
i am currently a sole proprietor i would like to incorporate would a llc give me as much personal protection as a corparate structure against law suit, say an auto accident an employee of mine crashes and victom hires attourny sues me and my insurance?
Reply : infotaxsquare.com
 
Dear Bryan: Thanks for choosing  InfoTaxSquare.com for your business needs. Protection is a legal issue and would suggest you to please consult with your attorney. Our job is limited to registration and taxation.

InfoTaxSquare.com

Business Documents
Filing!


Hannah   wrote on : Tue Mar 02nd,2010
I have a sticky situation. I am a member of a couple LLCs and opened my own side business account only as a dba just to deposit business checks and keep from depositing them into my personal accounts. I do not have any employees although I did get a separate EIN# for the account and all checks are made out to my personal name NEVER my business account name...I just feel better depositing them into the business instead of my personal. I do not conduct business with this account and right now my husband and I are technically partners on the account; it really is only there to separate the checks I receive from my other LLCs. I am hearing from peers to be safe I need to change my dba to an S-corp or LLC, but do I really? I of course want to be protected personally if someone were to ever sue me, but is there something else I can file or transfer my dba to for that protection? Should I just close my dba and not have a business account at all if I am not doing business? But what if I plan to use/perform business in the future?
Reply : infotaxsquare.com
 
Dear Hannah: Thanks for choosing InfoTaxSquare.com for your business needs. Your situation is really sticky. I do not know whether you retain an accountant or not. If the answer is yes then you must share it with your accountant. But If not then let me have this opportunity to help you. You should keep your business income separate from your personal. Retaining EIN (Employer Identification Number) does not serve any purpose. You better  register your company and your company can be a member of those LLCs' and then open a proper business account and deposit your business income and report properly to the concerned agencies.

InfoTaxSquare.com
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Department!


Terry Donn   wrote on : Wed May 05th,2010
I am starting a handy man service in Minnesota and need to get a account set up for the business. I have already received a tax ID number. The rest I am working on, thatís where I need the help. Does anyone know any resources to help put my own articles of organization together?
Reply : infotaxsquare.com
 

You are  not required to retain third party to register your business. You can prepare your own article of organization. But, it is highly recommended to retain a professional to prepare proper article to avoid skipping any important clause which may be a necessary element for your business. 



Haron G   wrote on : Wed May 05th,2010
My Corporation is registered with the IRS. We have an EIN. The problem is that I wasn't able to execute my business plan. Thus, my corporation is not active. Does that mean I am an owner of a shell corporation? If so, how do I file my taxes with the IRS?
Reply : infotaxsquare.com
 

Corporation does not register with Internal Revenue Service. It registers either with the county or the state depends on the structure you have selected (Corporation, LLC, Partnership or Sole Proprietor). EIN does not serve registration purpose.



wuetukal woldemariam   wrote on : Mon Dec 13th,2010
i am just an individual with one car who is providing transportation service in the state of Maryland. i named my limousine service as limousine inc. is this ok
Reply : infotaxsquare.com
 
Dear Wuetukal Woldemariam: As long as the name is available with the state and approved to Incorporate you can use it. Should you have any question or reservation please do not hesitate to contact us.



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Stefe   wrote on : Sun Mar 20th,2011
I just want to start a Corp or LLc just to be able to open a business account thru my bank that is seperate from my personel assets even though it's the same address. Best Solution for me please.
Reply : infotaxsquare.com
 
Dear  Stefe,

Thanks for choosing InfoTaxSquare.com for your business. If you register business either under Corporation or an LLC your personal assets will be treated separately. But it still depends the nature of your function. We would suggest you to please call us at 516.822.3100 for additional discussion to register your business either LLC or a  Corporation.


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kamali tiwari   wrote on : Sun Mar 27th,2011
Good morning Iam planning to start business from 2013. Therefore, its ok if i incorporate now?
kamali tiwari   wrote on : Sun Mar 27th,2011
Good morning Iam planning to start business from 2013. Therefore, its ok if i incorporate now?
Reply : infotaxsquare.com
 
Dear Kamali Tiwari,

Thanks for choosing InfoTaxSquare.com for your business needs. Yes, you can incorporate it now but you have to file returns for each year.

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Nikki   wrote on : Sun Jan 06th,2013
I own a business as a sole proprietor and am thinking about changing it to a corporation. My purpose in doing this is; 1. personal liability protection against any lawsuits 2. separation between business and personal assets 3. want to show all revenue under the corporation and only show paycheck to me personal. Q1: Is this the best route to go based on my needs? Q2: What is the difference between a "S Corp" and a "LLC"? Q3: What is the best way for me to file on-line? Thank you,
Reply : infotaxsquare.com
 
Dear Nikki,

Thank you so much to choose InfoTaxSquare.com for your business needs. LLCs (Limited Liability Companies) are recommended for Real Estate Businesses. S-corporation is not a business structure, it is a tax structure, like how do you want to file your taxes. LLC can also be taxed as an S-Corporation. For trading businesses you can go for a regular C-corporation and file an election for an S-Corporation for the tax purposes.

You can either use the following link to register an S-Corporation or can be called at 516.8222.3100 to discuss in person.

http://www.infotaxsquare.com/what-is-s-corporation.html

Please use following link to see more our services.

http://infotaxsquare.com/e-book/book-view.php


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