Have you been thinking that it might be time to take your business to the next level? If you’ve been in business for a while, with consistent and positive results, you’re probably ready to get more serious and grow the business, even just a bit. If that’s the case, it’s high time you consider incorporating your business to tap into a world of corporate benefits and limited-liability tax options that could help add dollars to your bottom line. While it may seem somewhat overwhelming, the benefits will certainly outweigh the work, so let’s take a look at incorporating a business and what you need to know to get it done right.
- Weigh the pros and cons to help decide if incorporation is the right fit. A few benefits include: limiting your personal liability, limiting personal assets to protect your home etc. If you think you may want to take your company public, incorporation is a must, also making it easier to transfer the business, if necessary.
- In order to incorporate, you’ll need a board of directors. The legal obligation of a BOD is to protect the shareholders investments, appoint officers of the company and generally act in the company’s best interest. At the same time, you’ll also want to gather shareholders. They can assist you with board member selection and will also help financially back the company.
- Hiring an attorney is an important step in the process, as the incorporation paperwork is complex and requires serious attention to detail. An attorney will also have the know-how to provide you guidance throughout the process; helping to be sure you file in the best interest of your company.
- At this point, you’ll also decide if you should file as an S or C corporation. If you have more than 35 shareholders, you’ll file C and will pay corporate-level taxes. If your business is smaller, you’ll file S and will not be required to pay corporate-level taxes.
- Working with your attorney, contact the Business Bureau or Secretary of State Office to retrieve the proper forms for your state. You’ll also be required to complete the articles of incorporation, which often each have their own fee.
- As a final step, you’ll register your corporation with the IRS, declaring your new incorporated tax status.
Now that the process has been laid out, do you think incorporating your business might be the best next step for you?
