Top Reasons to Incorporate Your Business

Those who are planning to form a corporation need to understand that there are some rules and regulations associated with it. Since it is a word created as a legal entity it comes with some stringent facts to not ignore. The corporation is a term that usually comes from the Latin corpus that means the Body. It is a legal person from the law perspective. It can create lawsuits, buy the property, and even sell it, contact and even be to commit any crime. In this, there would only be a single incorporation and a corporation can be created by filling up the charter application of the respective state.

The record facts that are put up:

  • Intended corporation purpose
  • Incorporators names and addresses
  • The purpose of the intended corporation,
  • The of capital stock amount and types which the corporation can issue
  • The holder’s rights and privileges of the holders for every stock class.

Why Incorporate?

This could be quite a common question for the individual to have at the beginning. There is no doubt that to form a corporation and operate as one comes with its drawbacks. Suppose the business owner shall be responsible for keeping any additional documents and even keeping the administrative details. Besides, there are also cases in which operating as a corporation could lead to the additional burden of the tax. This of course would be the last thing that any owner of the business would want especially at the very beginning of the operation stages.

Other than tax reasons, ideally, the common motivation to have the price set up for the corporation is to get the recognition that shareholders shall not be liable at the legal level for the corporation action. As the corporation shall have its different existence completely as compared to those who shall be running it.

Forming a corporation: A platform to carry business

Life with no limit

The corporation life is not like partnerships and proprietorships to be dependent on the individual’s life. It can even continue to achieve the goals and merge with other businesses. To be precise it can go indefinitely.

Shares transferability

The ownership interest that a person can have in the business can be transferred, sold, or even given to other members of the family. The diverting process of the ownership of the partnership and proprietorship can be stressful as the new deeds have to be drawn which of course takes time.

Raise investment capital

The investment capacity can be raised as it is quite easy to grab the attention of new investors in the corporation entity due to the limited liability. Besides, the shares can also be transferred easily. The stock can directly transfer to the new investor.


There is no doubt that to form a corporation can give better benefits of the tax in some circumstances. Besides, owners are also protected from company debts. Since it is one reliable body for guiding the managers and owners with its legal precedent, it is worth the option to choose.

Manolo Hilton
the authorManolo Hilton