I’m talking about incorporation.
Business owners who run unincorporated businesses are taking a HUGE financial risk without any sort of safety or contingency plan. Despite the risks, there are thousands of small business owners who are currently operating unincorporated businesses. Some of you just started your business, others are running it part-time, and the chances are high that at least half of you hadn’t even thought about incorporating until you saw this article. You might think that your business is performing just fine unincorporated – and you might be right. But if you want your business to truly prosper, you are going to have to incorporate. And believe me; you’ll be glad you did.
Here are the top five reasons why you should incorporate:
- Give your business legal rights. Incorporating gives your business all of the same legal rights as an individual (minus the voting). By incorporating, your business is becoming legally recognized as a (metaphorical) living, breathing entity with a well documented legal precedent.
- Protect your personal assets. Incorporating protect business owners from personal liability from company debts and obligations.
- Build credibility. Adding Inc. or LLC after your business name will give you instant credibility among customers, vendors, and business partners. It can even help you get financing as many lenders prefer to invest in incorporated businesses.
- Deduct your business expenses. Corporations and LLCs can deduct everyday operating expenses on their tax returns. Be sure to consult with your accountant about how best to file your business taxes so that they don’t get taxed on your personal returns as well.
- Immortality. No, not for you – for your business! Unincorporated businesses, sole proprietorships, and partnerships die along with their owners. An incorporated business can live on as your legacy long after you’re gone.
These are just a few of the many reasons why small business owners and entrepreneurs should consider incorporating. If you want to learn more about the benefits of incorporating a small business, join John Meyer of The Company Corporation as he hosts a free webinar with me on July 23.