Incorporating allows the business owner(s) to separate and protect their personal assets in case of a lawsuit or claims against a business entity. In an properly managed and structured company, owners have limited liability for outstanding business debts and obligations. This is one of the primary benefits to incorporating. The process needed to form either a corporation or an LLC is similar to a partnership, without the need for excessive paperwork and fees.
Improved credibility. One major benefit of incorporating your business is the enhanced credibility of having an “Inc.” or “LLC” after your business name. This distinction gives your business with the instant credibility and authority associated with owning an incorporated company. Potential consumers, partners and vendors may be more inclined to do business with an incorporated company over one who is not.
Tax flexibility & Benefits.
There are multiple tax advantages and benefits of incorporating a small business. Typically profit and losses are “passed-through” an LLC and get reported on the personal income tax returns of the owner. However, an LLC can also elect to be taxed as a corporation. Additionally, a corporation can avoid double taxation of corporate profits and dividends by electing Subchapter S tax status. We offer the S election service for both LLC’s and corporations for $99
LLC’s are unique in that they have flexibility in how they operate and be taxed. For example, LLC’s can also be taxed as if it were an S Corporation. Members can even be foreign nationals or other companies, and there is no limit on the number of members.
Protection of your brand. In most states, other businesses may not file your exact corporate or LLC name in the same state. From a branding standpoint, this not only helps protect your company’s reputation from being diminished by or confused with another company bearing a similar sounding name, but strengthens your businesses in terms of brand identity and marketing efforts.
Because an LLC or corporation is a separate entity on its own, it, can apply for and build credit separately from the partners’ personal credit. This provides another great benefit to incorporating because it helps protects each owner’s or shareholders personal credit and makes bad personal credit less of an issue.
Although LLC’s are relatively new in many states of the US, they have been in operation overseas for over a century. Foreign investors are often more familiar and comfortable with the LLC structure. This can also be added to the benefits of a limited liability company. Also, because investing in an LLC is less imposing than bigger corporations, so they provide a great place for foreign investors to enter the U.S. market.