Although incorporating a business may not be the right choice for everyone, the process does offer numerous benefits to entrepreneurs. Below are a few of these benefits:
- Protects assets: incorporated businesses grant owners the opportunity to separate their personal assets from their company. As a result, owners often have limited liability for business debts and, if they go out of business or are sued, do not have their personal assets taken as collateral.
- Makes selling easier: compared to certain business types, corporations are more appealing to buyers. The reason for this is that new buyers are not liable for any of the previous owner’s mistakes or illegalities and, thus, are more confident about their purchase.
- Offers tax breaks: owners receive several tax breaks with a corporation, including write-offs for rent and medical insurance and savings on self-employment taxes. Further, businesses that are incorporated allow owners to report profit and loss only on their personal income tax.
- Longer life-span: unlike sole-proprietorships and other types of business, corporations do not end when an owner or member passes away. This gives incorporated companies that ability to last virtually forever as long as they remain profitable.
