Benefits of Incorporating

There are definite advantages and disadvantages to every business type. You can choose to operate as a sole proprietor, set up an LLC or incorporate your business. While each of these do have their own advantages, here we will focus on the benefits of incorporating your business.

Benefits

It protects your personal assets (for example, your family's home) in the face of a lawsuit or business debt. Otherwise, you would be held personally liable.

Time Frame

Your business can go on without you. This means that your business can continue even after you die or decide to step down and retire. This is a major advantage if you want to pass your business on to others.

Prevention/Solution

Incorporating can lower your taxes. If you are a sole proprietor, the self-employment tax is pretty hefty--15 percent of every single dollar you make, even the otherwise tax-deductible portion. You can avoid this by incorporating. It will also be easier to write off business expenses.

Potential

Other people see you as a business. This is especially important if you are offering a service and working from home. Consumers and other companies will perceive you as a business rather than as an individual working from home.

Considerations

It will help protect the name and identity of your business. This is important because you don't want others to accidentally or purposely take the name of your business.