Why incorporate a business – causes and benefits – Bent Enterprise

Why incorporate a business – causes and benefits

While establishing a business the first question arises is why incorporate a business? The answer to the question why incorporate is that by incorporating a business you are giving a legal identity to your business. Many businessmen have an ambiguity why incorporate?
The incorporation helps any partnership or single proprietorship to take a form of single business and gets a formal recognition by the state where the business has been incorporated.Even many small businesses have the question why incorporate? Doing so changes their identity to a corporation or to an LLC (limited liability Company). Also, an entrepreneur should understand whyincorporate a business is essential. The conversion protects the entrepreneur’s personal assets against any debt or judgements as such things can be claimed against business.

Advantages of incorporation

To know the advantages behind why incorporate the business, we should understand its benefits. The incorporated business has many fold advantages over sole proprietorship and partnership.

  • Why incorporate? The business should be incorporated for protection of personal liability.
  • Why incorporate? To save additional tax deductions.
  • Why incorporate? To raise company per capita income by selling shares.
  • Why incorporate? To establish separate business identity from the owner.
  • Why incorporate? To protect personal assets from debts and judicial matters as the company will be liable to pay.
  • Why incorporate? Incorporation formation reduces the chances of tax audits.

There are several other factors as to why incorporate a business?

  • Why incorporate? Incorporation adds the extra reliability and company’s name authenticity.
  • Why incorporate? People such as consumers and vendors preferred to do business with incorporated business.
  • An entrepreneur should understand Why incorporate a business? The incorporation i.e. adding “Inc.” or “LLC” to the business increases the market value, thus enhances the brand name.
  • Why incorporate a small business? It is advisable to incorporate a small business as it helps to retain the business identity.
  • Why incorporate? In the event of an unforeseen situation such as sudden death of the owner will not dissolve the incorporation, unlike partnership or proprietorship.
  • Why incorporate? Incorporation could be said as a lifeline of any business. It protects the owners and its shareholder during any causality.
  • Why incorporate? Incorporation reduces the chances of misunderstanding among the partners or shareholders.
  • Why incorporate? It helps the company to issue stocks to third parties such as employees, contractors etc.
  • Why incorporate? Establishment of corporation helps the company to gain funds from different business structures.

Thus overall incorporation helps the entrepreneurs to stay safe and protects their personal assets. Thus understanding why incorporate is necessary which is now simple after reading the above advantages and factors. In short, why incorporate? To protect your personal identity. Why incorporate? To get the advantage of tax benefits. Why incorporate? To create a separate personal identity. Why incorporate? To liquidate the business hassle-free by transferring the rein to another entrepreneur with the consent of all other partners.Why incorporate? To avail the limited liability against the shareholders. Why incorporate? To get an opportunity to work with other larger business corporation or entities.