If you do well with your business, you may want to incorporate it. There are many advantages gained by incorporating. For one, if (and this is a BIG if, but you never know if you are ever sued, your personal assets will be considered separate from your business assets. On the off chance that anything like that ever happens, you will be immensely thankful that you incorporated.
It works the other way too, if you are ever personally sued, all your business assets are safe. Legally, you and your corporation are two entirely separate entities.
Another reason for incorporating is to save money on taxes. Talk to an accountant about the different ways to incorporate if you qualify for an S-corporation or an LLC, you may save considerably in taxes. Plus, its always nice to pay your taxes on a monthly or at least a quarterly basis rather than owe one giant, lump sum to Uncle Sam on April 15th.
Many a business has gone bankrupt due to unpaid taxes.
Another benefit of incorporating is to convey professionalism. Most people recognize that the abbreviation of Inc or LLC after a company name is evidence of incorporation. Your prospects may take you more seriously. And every little bit helps.
You may get a few more sales just due to the fact that you look like a real company!
So talk to your accountant today and find out if incorporating is the right move for you to make. It takes some time to start the process, but can be well worth it in many instances.
by L A Parmley. .
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