Moving from sole proprietor to a corporation is a vital step along the way in the growth of your business. As your business grows, you have more personal exposure, need more capital to expand and require more ways to save money. Becoming a corporation or LLC can help you do just that. Below are the major advantages of incorporating your small business.
1. Incorporating your business adds a certain level of professionalism or credibility to your business.
2. There are some tax advantages associating with incorporating.
3. It eliminates the risk of exposure to lawsuits that could cost you your personal property, possessions or assets.
4. Becoming a corporation or LLC also gives you the ability to raise money fairly quickly by selling shares to investors. This is a great way to expand your business without having to front a bunch of money. In a time when credit markets are tight and getting small business loans is increasingly difficult, incorporating your business can allow you to have funds to market your business more aggressively.
5. Having a corporation allows you to establish credit in your business name. This can be advantageous if your personal credit is not the best. In some cases you will need to submit both your social security number and business credit for a background check when applying for loans or for credit. However, this is not always the case and even so, your business credit carries weight to offset your personal credit if it is not so strong.
6. Changing or transferring ownership of the Incorporated business is much easier and smoother than it is if you are simply a sole proprietor.
7. You can also choose the option to incorporate offshore. There are several advantages to doing so but one major advantage is protection of your privacy. It is much more difficult for someone to conduct an investigation into your business. You can also keep your personal identity protected when incorporating outside of the United States
