Consult with an experienced business lawyer to know the advantages of incorporating your business

A business law firm can assist business owners to incorporate their business. A corporation offers liability protection to its shareholders. This is the main reason for formation of a corporation. The owners of a corporation are not liable under law for the debts and obligations of the corporation. A corporation is a legal "person" which means that a corporation has the standing to sue and can be sued, distinct from its stockholders. Shareholders cannot be personally liable for corporate debts because the corporation is a separate legal "person". Stockholders can also sue the corporation through a derivative suit and makes ownership in the company (shares) easily transferable. Since the corporation is a legal person, it has a perpetual life. The deaths of officials or stockholders do not alter the corporation’s structure and the corporation continues in existence. Unlike sole proprietors and general partners in a partnership who are personally and jointly responsible for all the liabilities of a business such as loans, accounts payable, and legal judgments, in a corporation, however, the stockholders, directors and officers usually are not liable for their corporation’s debts and obligations. Their individual liability is limited to the amount they have invested in the corporation. The shareholder can held liable for the debts of the corporation if a shareholder has given a personal guarantee. Corporations can hold personal assets like houses, cars or boats. The assets of the corporation are safe from the creditors of the shareholders and directors. The assets of a corporation cannot be seized by the creditor of the owner. But the owner’s shares in the corporation can be seized as it is considered a personal asset. A shareholder an easily transfer ownership interest in a corporation to other. The transfer can be in part or whole. Compared to other business structures, it is much easier to set up retirement funds and qualified retirement plans with a corporation.



The life span of a corporation is unlimited. It can continue indefinitely. Its life is not affected by the death of shareholders, directors, or officers of the corporation. It extends beyond them. Corporations have more ability to raise money. Corporations can build their separate credit history by applying for and using corporate credit. They also can acquire their own credit rating. The owner’s ratings do not have any affect on these ratings. Corporations can borrow and incur debts. They can also sell the shares and raise equity capital which does not have to be repaid and incurs no interest. A corporate structure can give out a powerful message to customers, suppliers and other business associates. For many, a corporation symbolizes permanence, credibility and stature. People perceive corporations as being more stable than unincorporated businesses. Until it is paid out, the earnings of a corporation remain within the corporation. A corporation distributes profits in the form of dividends or through redemption of shares, or the repurchase of shares by the corporation. The board of directors has the discretion to declare dividends. Seek the services of a business law firm to know the benefits of a corporation