The Benefits Of Going From Solopreneur To Incorporated
Over the last 18 months, many people have reinvented themselves. Some have done so because they have been presented with a rare opportunity in life that they decided to take advantage of. Some have done so out of necessity. Whatever the reason may be, if you are one of the people who have decided to take the plunge and become an entrepreneur, you are now your own boss! If you are the only one running your business, you have full control over every aspect of it. But once you start to scale up and need to expand, the next step may be to become incorporated.
Levin Law Group can help you take that next step on your business journey!
Some may have certain reservations about doing business as a corporation in certain circumstances. As a company owner, for instance, you would be accountable for extra record-keeping obligations, as well as administrative responsibilities. More importantly, functioning as a company may increase the amount of taxes owed. This is undoubtedly the last thing a business owner wants, particularly when the company is just getting started! Working with a business law attorney from Levin Law Group will give you the insight you need to understand the benefits of incorporating.
One of the primary benefits of incorporating is liability protection. The ability to safeguard your personal assets is a significant benefit of incorporating. In your capacity as a sole owner, you are liable for the obligations of your business, and your personal assets may be taken in order to satisfy debts incurred by your business. When you incorporate, you will be most shielded from any possible legal problems that your business may face. The amount of money you stand to lose personally will be restricted to the amount of money you have put into your company.
Another benefit to incorporating is that incorporated companies are subject to a different tax rate than individuals. By forming a corporation, you may keep the taxes you pay on your personal and company income separate. Using this information, your tax adviser or business law attorney may help determine what your effective corporation tax rate would be if you were incorporated and compare it to your personal tax rate. If the number is smaller, incorporating may be advantageous. A second tax advantage would be that corporations and sole proprietorships may deduct the same business expenditures on their tax returns. Among these costs are employee health insurance premiums, operational expenditures, and capital acquisitions. Corporations also have the ability to deduct wages and bonuses given to business workers from taxes. Some of the fringe benefits for corporate owners in New York are not made available to single proprietors.
Incorporation has another indirect benefit – it adds legitimacy to a business. The public and business sectors see corporations as professional entities. An LLC or Inc. suffix conveys credibility and indicates that the business is legally formed and registered in the region in which it functions.
Last but not least, a company in New York has an indefinite or continuous life. In the case of a sole proprietorship’s death, the net assets are transferred to the heirs, but contracts and leases that are essential to the operation of the company may not. A company, as well as all of the contracts and agreements it has created, should continue to exist if one of its owners dies or the ownership changes. Because of this, being able to transfer company shares provides a distinct benefit when it comes time to pass on ownership.
The attorneys at Levin Law Group would be more than happy to discuss these benefits and any others that may be available to you if you are ready to go from solopreneur to incorporated.
Contact one of our offices today to set up a meeting to see how we can add value to your business and help you expand to meet your company’s full potential!