This article was updated September 24, 2020.
Have you been thinking about incorporating, but not sure it’s worth it? You’re not alone. If you haven’t incorporated yet, you could be missing out—and potentially leaving a lot of money on the table. Here are five reasons to consider taking incorporation off the back burner and getting started today:
1. You won’t lose your house.
As far as the IRS is concerned, as a sole proprietor, you and your business are the same thing. That means if someone were to sue your business, they could win not just your business earnings but your personal assets, too—including your home, your car, and your retirement savings. But incorporating your business makes it a separate legal entity, so generally, your personal assets stay safe and secure.
2. You could save tons of money.
Once you incorporate, your business could benefit from tax savings depending on the entity type. Sure, you might have some additional paperwork to do, but that’s a small price to pay for what could be a lot more in savings. Talk to a lawyer to learn what’s right for you.
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3. You’ll have more ways to make money.
It takes money to make money, and once you’ve incorporated, you can raise funding for your business in a variety of ways. Depending on the type of company you form, you can accept bank loans, private investments, stock sales, or donations.
4. People will take you seriously.
Who would you rather offer a big corporate contract: Malia, the freelance designer, or Design by Malia, LLC? Incorporation adds a sense of legitimacy to your business and makes you more likely to be hired, especially by larger companies. It shows you take your business seriously and know how to play by the rules.
5. It opens doors.
In some cases, incorporation isn’t just a good idea; it’s required. If you want to do business with the government or a non-profit organization, for example, you’re legally required to be incorporated. That’s a whole lot of opportunity to pass up if you don’t incorporate!
Have we convinced you yet? Incorporating is a great idea for your business, and it’s a lot easier than you think. Check out our incorporation center to get started, and we’ll help you choose a business type, file your paperwork, and connect you with a business attorney for advice. So get started today!