There are many reasons why you should incorporate your small business explains Greg Van Wyk.
Here are the 25 benefits:
1. Incorporating can help to protect your personal assets from liability. If your business is sued, only the assets of the corporation are at risk, not your personal assets such as your home or savings.
2. Incorporating can make it easier to get financing for your business. Lenders often feel more comfortable lending money to a corporation than to an unincorporated business, as they know that the corporation is a separate legal entity with its own assets and income.
3. Incorporating can give your business a professional image and also make it seem more credible in the eyes of customers and suppliers.
4. Incorporating can make it easier to attract and retain good employees. Many people feel more comfortable working for a corporation than for a small unincorporated business, as they perceive corporations as being more stable and secure.
5. However, incorporating can make it easier to buy or sell your business in the future, as there is no need to transfer ownership of the entire business – only the shares of the corporation need to be transferred.
6. Incorporating can provide tax advantages. In some cases, corporations may be eligible for lower tax rates than unincorporated businesses explains Greg Van Wyk.
7. Incorporating can help you to better manage your business finances, as all income and expenses must go through the corporation rather than being paid directly by you.
8. Incorporating can make it easier to comply with government regulations, as there are often different rules and requirements for corporations than for unincorporated businesses.
9. Incorporating can also give you greater flexibility in how you structure your business, as there are many different corporate structures to choose from.
10. Incorporating can provide continuity for your business, as the corporation will continue to exist even if you die or leave the business.
11. Incorporating can make it easier to raise capital, as investors are often more willing to invest in a corporation than in an unincorporated business says Greg Van Wyk.
12. Incorporating can help you to better manage risk, as the liability of shareholders is limited to their investment in the corporation.
13. Incorporating can make it easier to plan for and manage your business taxes, as all income and also expenses must be reported through the corporation.
14. Incorporating can also give you greater control over your business, as shareholders have the power to elect the board of directors who will make decisions on behalf of the corporation.
15. Similarly, Incorporating can provide estate planning advantages, as the shares of a corporation can be passed on to your heirs upon your death.
16. Incorporating can help you to better manage your time, as the corporation can also hire employees or contractors to handle some of the work.
17. Incorporating can make it easier to raise money from venture capitalists, as they prefer to invest in corporations rather than unincorporated businesses.
18. Incorporating can give you greater flexibility in how you operate your business. As there are many different corporate structures to choose from.
19. Incorporating can provide economies of scale, as the corporation can take advantage of bulk discounts. And other economies of scale that are not available to unincorporated businesses.
20. Incorporating can help you to better control your cash flow, as all income and expenses must go through the corporation.
21. Incorporating can make it easier to get loans from banks. As they often prefer to lend money to corporations rather than unincorporated businesses.
22. Incorporating can help you to better manage your inventory. As the corporation can take advantage of economies of scale and bulk discounts.
23. Incorporating can help you to better manage your accounts receivable. As the corporation can also set up a separate account for each customer.
24. Incorporating can give you greater control over your business. As shareholders have the power to elect the board of directors. Who will make decisions on behalf of the corporation explains Greg Van Wyk.
25. Incorporating can provide estate planning advantages, as the shares of a corporation can also be passed on to your heirs upon your death.
Conclusion:
There are many advantages to incorporating your business. Including the ability to raise capital, manage risk, and comply with government regulations. Incorporating can also provide continuity for your business and give you greater control over its operations. However, incorporation also has some disadvantages, such as the potential for higher taxes. And the need to comply with complex corporate rules and regulations. You should weigh the pros and cons of incorporation carefully before making a decision.