Incorporating your business may be advantageous for a number of reasons. However, selecting the best business entity for your business venture is always a personal decision to be made after weighing the pros and cons of possible business entities.
Avoiding Personal Liability
One significant reason businesses become corporations is to separate personal liability from corporate liability. In other words, the corporation protects you, the individual, from any corporate activities. In other words, the activities of the corporation remaining with the corporation and are not generally transferred to an individual. The corporation can be sued which should have no impact on a shareholder individually.
Tax Benefits of the Corporation
Another important reason some businesses incorporate is the ability to structure taxes differently which can benefit you with lower overall taxes. The corporation can be taxed as a C Corporation or an S Corporation.
Mechanism for Raising Capital
A Corporation is a tidy way to bring investors and others into your business entity and share a portion of the business with them. Each member of the Corporation can be given shares of the corporation. This allows you to bring in investors and give them a share of the business.