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Incorporation

Say, you started a business on a small scale and now want to scale up or you wish to start a startup on a large scale, then incorporation is the answer Incorporation (abbreviated Inc. in U.S. business names) is the forming of a new corporation. The corporation may be a business, a non-profit organization or even a government of a new city or town.

Corporations are large firms and are generally have a good safety net. Well, corporation, may create an image of something big and unmanageable in your mind. But then there are several advantages which corporations enjoy, some of them are:

1. Legal benefits
A corporation enjoys several benefits such as protection of personal assets, and safeguarding personal assets against the claims of creditors and lawsuits. Small scale businesses operators, 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, something which corporations do away without.

2. Transferable ownership
Ownership in a corporation or LLC is easily transferable to others, either in whole or in part which may not be the case in sole proprietorship or partnership

3. Retirement funds Retirement funds and qualified retirement plans (like 401ks) may be set up more easily with a corporation. These retirement funds not only safeguard your future but also give you the option to raise capital during the time of need.

4. Taxation
Among the major benefits that corporations allow, one pertains to taxation. Different countries have different laws to define the taxation norms for corporations. For example, in the United States, corporations are taxed at a lower rate than individuals

5. Raising funds through sale of stock.
Corporations bring with them tags such as credibility and dependability which entails them several luxuries such as capital from investors. They may raise capital through the sale of stock easily.

Thus one should not solely look at the disadvantages in terms of size for there exists several advantages in forming a corporation.



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