5 Reasons To Incorporate Your Business

5 Reasons To Incorporate Your Business

by Johnny S

While most small business owners tend to go for sole proprietorships or partnerships because they’re cheaper and easier to form, incorporating your business also gives a lot of benefits. Yes, it’s true that you have to pay more taxes and do more paperwork. However, the advantages may trump these disadvantages if you know how to do business.

Besides, you may hire a good consultant like Incfile to help you incorporate your business. Check out what people have to say about the company through Incfile Reviews.

Anyway, here are 5 reasons to incorporate your business:

  1. You Can Issue Shares of Stock for Capital

The first benefit is that you can issue shares of stock for capital. This makes it easy for you to raise money for your business. Once you offer a certain number of stocks, investors have to park their money in your company to own the stock. You can use their money to fund your business’ operations.

This benefit is especially true for public listed companies wherein investors of the stock market put money into your company to gain a profit. Corporations have unlimited opportunities to gain capital.

5 Reasons To Incorporate Your Business

  1. You Can Protect Your Personal Assets

Another very popular advantage of a corporation is that you can protect your personal assets. If the company is stuck in debt or has a lot of liabilities, the debtors cannot go after the personal assets of the shareholders. They can only go after the assets of the company.

This is because corporations have their own legal identity separate from the owners. Legally, corporations are entities in itself and are only “hiring” shareholders to work for them.

  1. Your Business Can Last More than a Lifetime

One great thing about corporations is that they can last more than a lifetime. Unlike sole proprietorships and partnerships, corporations can’t be dissolved easily. As long as there are shareholders, directors, and people working for the corporation, it may stand firm and operate for many years more.

  1. You Can Remain Anonymous

Another great thing about corporations is that their shareholders can remain anonymous. Usually, the officers that are known to the public are the president (or CEO), the vice president, the corporate secretary, and the treasurer. These people are placed in the SEC certification. However, the other shareholders may remain anonymous if they would like.

  1. You Can Enhance Your Brand

Lastly, you can enhance your brand name by incorporating your business. Corporations usually have more credibility than sole proprietorships or partnerships because they’re under more scrutiny from the government. So if you incorporate your company, your brand can gain more credibility from both the public and the business world.


As you can see, there are a lot of benefits that you can get from incorporating your company. While it is definitely harder and more costly to put up a corporation, the long term benefits outweigh those downsides. If you want a business that can garner you some big passive income in the years to come, then you’d best open up a corporation.

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