How to Incorporate
Incorporating a business allows business owners to separate their personal identity and financial assets from that of their business. Incorporating is something any business can do, regardless of its size or number of employees. When a company is not incorporated, creditors or partnerships can seize the business owners' personal assets, such as homes, savings, or cars. However, when a business is incorporated, only the money put into the business can be seized or lost in the event the business tanks or cannot support itself financially.
Incorporating a business requires a number of steps. Certain licensing, paperwork, and fees are required in order to declare your business as a corporation. There are several types of incorporations that can be made, including international, in-state, and out-of-state, so there are many factors to consider before deciding to incorporate. It's best to discuss the requirements with your accountant, but as a general rule, the steps involved include:
1) First, decide whether you want an in-state, out of state, or foreign incorporation. As a general rule, smaller businesses decide to incorporate within their own state.
Making the decision to incorporate can ultimately offer the business owner greater savings and more protection of personal assets. In addition, there are many tax advantages that are associated with incorporating a business. When incorporating your business, you must first contact the Secretary of State office in your hometown to obtain the proper paperwork.
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Posted by DF