Biz Capital Solutions

One of the most common mistakes that business owners make is to not incorporate their business.

Some of the simple benefits are:

• establish corporate credit and quite using your personal credit. (I will write in detail about this later)
• protect your personal assets from law suits
• The Board of Directors in some states are protected from litigation.
• It is much easier for a corporation to get a business loan and/or raise funds

There are many other reasons but I wanted to list the major ones here. Please find below detailed information.

If you have any questions please contact me at info@findbusinesscapital.com or call 800-368-1498.

Robert Ritch

Incorporation (A.K.A Inc) is defined as the forming of a new corporation (a corporation being a legal entity that is effectively recognized as a person, albeit a fictitious one, under the law). The corporation may be a business, a non-profit organization, sports team or a government of a new city or town. 

Legal benefits

• Protection of Personal Assets or the safeguarding of personal assets against the claims of creditors and lawsuits.

   

• Sole proprietors and general partners in a partnership are personally and jointly responsible for all the liabilities of a business such as loans, accounts payable and legal judgments.

   

• In a corporation, however, stockholders, directors and officers typically are not liable for their company's debts and obligations. Instead, they are limited in liability to the amount they have invested in the corporation (eg: $100 in stock was purchased, no more than $100 can be lost).

   

• Corporations and Limited Liability Companies (LLCs) may hold personal assets like houses, cars or boats. If one is personally involved in a lawsuit or bankruptcy, these assets may be protected. A creditor or the owner of a corporation or LLC cannot seize the assets of the company; however, they can seize their ownership shares in the corporation, as that is considered a personal asset.

   

• Transferable Ownership - Ownership in a corporation or LLC is easily transferable to others, either in whole or in part and some states' laws are particularly attractive to this end.

   

• Retirement Funds - Retirement funds and qualified retirements plans, such as a 401(k), may be established more easily. With certain restrictions these funds can be used managed and used by the corporation.

   

• Taxation - In the United States, corporations are taxed at a lower rate than individuals. Additionally, they can own shares in other corporations and receive corporate dividends 80% tax-free.

   

• There are no limits on the amount of losses a corporation may carry forward to subsequent tax years. A sole proprietorship, on the other hand, cannot claim a capital loss greater than $3,000 unless the owner has offsetting capital gains.

   

• Taxation Corporations can only deduct net operating losses going back two years and forward 15 years.

   

• Raising Funds Through Sale of Stock - Capital from investors can be raised for corporations easily through the sale of stock.

   

• Durability - A corporation is capable of continuing in perpetuity. Its existence is not affected by the death of shareholders, directors, or officers of the corporation.

   

• Credit Rating - Regardless of an owner's personal credit scores, corporations, acquire their own credit rating, and build a separate credit history by applying for and using corporate credit.