Why Should I Incorporate?

How You Can Benefit from a Corporation or LLC 

 

There are many benefits to incorporating your business regardless of its size or type of business. Advantages of forming a corporation or Limited Liability Company (LLC) are:

• Personal asset protection. Both corporations and LLCs allow owners to separate and protect their personal assets in the event of a lawsuit or claims leveled against a business entity. In a properly structured and managed company, owners should have limited liability for business debts and obligations. This remains one of the biggest benefits to incorporating.
• Name protection. Other businesses may not file your exact corporate or LLC name in the same state. Not only can this help protect your company's reputation from being diminished by or confused with another company with a similar sounding name, but this is also one of benefits of incorporating that aids your business in terms of name-recognition, marketing, and branding efforts.
• Perpetual existence. Corporations and LLCs continue to exist even if ownership or management changes. Sole proprietorships and partnerships just end if an owner dies or leaves the business. Forming a corporation ensures that your company's legacy can remain, as well as continue to provide employment and services for clients should any changes in ownership occur.
• Tax flexibility and incorporation tax benefits. Though profit and loss typically pass through an LLC and get reported on the personal income tax returns of owners, an LLC can also elect to be taxed as a corporation. Likewise, a corporation can avoid double taxation of corporate profits and dividends by electing Subchapter S tax status.
• Deductible expenses. Both corporations and LLCs may deduct normal business expenses, including salaries, before they allocate income to owners.

Should My Business Incorporate or Form an LLC?

Contact the law Office of Efrat Levy to Incorporate your Business in California