Should I Incorporate?
When people decide to start a business, they must determine what type of legal structure best suits their needs. Will it be a sole proprietorship? A partnership? Perhaps it should be a corporation or a limited liability company (LLC)? Maybe it is a nonprofit or cooperative? A Hoffman Estates attorney with experience in business and corporate law assists people not only with entity selection and formation but also with all other legal aspects of business start-up, in addition to providing business owners with ongoing representation and corporate management.
Benefits of Incorporating
Forming a corporation or limited liability company has many potential benefits, including:
- Personal asset protection
- Protection of the business name
- Increased credibility owing to the “Inc.” or “LLC” after the business name
- Continued existence even if ownership or management changes
- Avoidance of double taxation by electing S-corporation status
- Tax breaks such as being taxed at a lower rate than individuals and writing off health insurance premiums
- Ability to raise capital through the sale of stock
- Ability to establish retirement fund plans like a 401(k)
- Better lending options from banks that prefer to work with incorporated borrowers
Perhaps the most important benefit of incorporation is that it creates a legal separation between business and owner. If the corporation defaults on a loan, goes bankrupt, or has a personal injury or employment law judgment issued against it, the owner’s personal assets cannot be seized by courts or creditors. To ensure your corporation is set up and managed properly to afford you maximum personal asset protection, contact a qualified Hoffman Estates lawyer today.
Downsides of Incorporating
Incorporation is not the right choice for all businesses. Some of the potential drawbacks to incorporating include:
- Double taxation of C-corporations
- Fees for filing articles of incorporation plus any ongoing fees charged by the state
- Stricter record-keeping and reporting requirements
- Having to develop and maintain corporate bylaws
To determine if incorporation is right for your new business, contact a knowledgeable Hoffman Estates attorney to assess your goals and develop a personalized business strategy that will bring your entrepreneurial vision to life. Whether your vision includes a local shop or a national corporation, start building a lasting relationship with an experienced Hoffman Estates lawyer today to help your business develop and prosper.