Should You Incorporate Your Business?
Chances are that if you’re thinking about starting a business or you have recently started one, you have heard a lot about incorporating. Incorporating is a process by which a business owner can establish their business as its own legal structure that’s independent of the owners of the company. This means that the business as an entity that can make actions without the owner being liable for any debts and obligations within certain limits. Basically, incorporating your business is a way to protect yourself and give your business more credibility. If you are planning on incorporating your business, here are the things you need to know before you start that process and when you’re ready to incorporate your business, HJR Global can help.
Understanding Incorporation
Corporation as a word comes from the Latin word corpus or body because a corporation functions as a legal body. In terms of the law, a corporation has a number of the same rights as a person, including the ability to create and sign contracts with other corporations, pay taxes, file lawsuits, buy and sell property, or even commit crimes in some situations. As a business owner, the biggest reason why you would want to incorporate your business is to limit your liability from business obligations, if the worst should happen and the business folds. You might also incorporate your business if there is a chance that you might want to sell the business later down the line. Corporations are not dependant on the lives of their founders and they can survive even if the owners should pass away or decide they want to do something else.
Is Incorporation Right For You?
Despite the benefits, incorporation isn’t right for every business owner. If you are self-employed with a sole-proprietorship or you have a general partnership, the choice to incorporate your business depends on the type of work you are in. If you have many contracts with clients and other businesses, it’s better to remove yourself from the liability that a company holds. If you are creating a startup with the hopes that someone will pick up your idea later, the transferability of a corporation makes such a transaction much easier. However, there are a number of formalities and annual responsibilities that incorporated businesses must contend with, not to mention the expense of setting up a corporation and the cost to dissolve it if things should go south is much more expensive than disbanding a sole proprietorship. The choice to incorporate your business should be made based upon your needs as a company and an owner.
How To Incorporate
If you want to incorporate your business, each state has a required list of qualifications and rules for incorporation process, which you can generally find with a quick google search. Here is where you file for incorporation in Arizona. However, don’t just click the link and start going to town. Every state requires you to file Articles of Incorporation, which set out responsibilities for aspects of the business, the physical location of the business, the names of owners and decision-makers in the company and other details. Some states have a very convoluted process and small details can get your forms rejected, so you need to make sure that you have the right information the first time. You could pay an attorney some exorbitant fee or you could let the team at HJR Global help you incorporate your business. We have all the personnel in-house to help you file to incorporate your business. Contact HJR Global today.
