Incorporating a Small Business

Having a self-sufficient business is probably one of the most common of dreams. Even more so incorporating small businesses into big businesses with larger perspectives and larger visions.

If you have a small business there comes a point in time when you will need to make a decision on whether or not you need to incorporate.

Almost every small business starts as a proprietorship or a partnership and as they grow they ponder over the idea of incorporating.

One of the primary advantages of incorporating your business is that it offers limited liability. If a business is under a sole proprietorship the liability of the business is the responsibility of the proprietor. When the same business is incorporated, the responsibility will depend on the amount of stake or share in the company.

Another salient feature of incorporation is that if you have a debt under the name of the corporation you as an individual will not be held responsible for it. With a proprietorship or partnership, a similar debt would have resulted in the seizing of your assets.

The second most important advantage of incorporating your small business is continuance. In comparison to a sole proprietorship a corporation has a larger life span. In fact legally it has an infinite life span.

If the company shareholders leave the company, die or if the ownership changes. A corporation will always exist.

Business is driven by capital and as a corporation it is easier to raise capital. Influx of capital or funds will help the business to develop, grow and bring in more funds. When you incorporate your small business, you are not only able to borrow as a corporation, but you can also sell shares and raise equity capital.

If the key benefits of incorporating are in line with your companies goals you can begin the process of incorporation.

Labels: incorporating, incorporating your small business, small business, your small business

If you own a small business and you wish to protect your assets, and stretch your tax dollar to the fullest then you might wish to consider incorporating your business. Maybe you don't know a lot about how to incorporate your business, or why you should. Perhaps, you'd like to know the history behind the reasons people have incorporated their businesses in the past, or how that relates to the same needs, challenges, and issues of our present time and your particular business.

If so, there is a book that I would highly recommend, and one that I have in my own personal library. Interestingly enough, this book has been on my library shelf for 30-years. And when I was clearing out all the old books, donating some and giving others away, I decided to keep it. Not because I could use this same book today to incorporate a business, I can hire a lawyer to do that.

Rather, because I think the history, and arguments for and against incorporating a small business are discussed at length, and they still play today. The name of the book is;

"How to Incorporate; A Handbook for Entrepreneur and Professionals," by Michael diamond and JL Williams, 1987.

Boy, have things changed since 1987, still much of the philosophy and definitions of course and all the history is the same, but the forms are much different and now there are LLCs which they didn't have at all back then. This book is extremely interesting because it helps us understand the evolution of corporations in America both large and small. The flow of business law is quite interesting in that regard. Indeed, I hope you will please consider this.

Article Source: Lance Winslow

Labels: book review, incorporating your small business, legal book review, your small business