Inside Small Business | Small Business & Home Business Marketing
Starting a New Business? Protect Your Personal Assets by Incorporating
BY BUSINESS FILINGS INCORPORATED
As a new business owner, or even as a business owner who has been operating a sole proprietorship or general partnership, one item you may consider is the decision to structure your business as a corporation or limited liability company (LLC). Doing so helps protect your personal assets from the debts and liabilities of your business. Given the litigious nature of society today, this is often a very important and common step. Corporations and LLCs are considered legally separate entities from their owners. Because of this, the owner’s personal assets are typically regarded as separate from the assets of the business. The owner’s liability is often limited to the amount he/she invested in the business. Incorporation can help protect the owner’s house, car, etc., should the business be sued or face bankruptcy.
In addition to the personal asset protection incorporation provides, it can also provide certain tax advantages, help establish credibility for the business with potential customers, vendors, partners, and employees, and can make raising capital for the business easier.
Still, many misconceptions surround the idea of incorporation. Business owners often think it is too costly or too time-consuming; however, neither is true today. There are three primary ways to incorporate a business: you can do it yourself by filing the documents directly with the state, you can use an incorporation service provider, or you can use an attorney. The best option for you will typically depend on your personal situation.
Completing the incorporation filing yourself is the least expensive, but is typically the most time-consuming. Using an attorney is the most expensive, but typically doesn’t require much of your time. Using an incorporation service provider usually fills the middle ground. It generally takes about 10-15 minutes to provide the necessary information to place the order; then the provider will complete the formation process. You will pay the state filing fees, which vary by state, plus a service fee, which varies by provider.
It is recommended that business owners research the different types of business structures available (sole proprietorship, general partnership, C corporation, S corporation, and LLC), and the common advantages and disadvantages of each. Every business has different needs and goals, but helping to protect your personal assets should be an aspect that is closely considered.
Business Filings Incorporated helps small business owners form corporations, LLCs, and nonprofits in any state. In addition to helping educate business owners on the incorporation process, Business Filings provides easy-to-use, affordable services that do not compromise quality.
Posted on Friday, July 16th, 2004 at 1:46 pm and is filed under Legal, Small Business. You can follow any responses to this entry through the RSS 2.0 feed.
