Business Incorporation: Why is it Important?

      To incorporate is the process of constituting a company or other organization as a legal corporation. It changes a sole proprietorship or general partnership into a formal company. It will from that point on be legally set apart from those who started the business. The best reason for deciding to take this step is to limit personal liability. An owner is responsible for all debts and losses, but when incorporated, usually personal assets that have not been invested in the company are protected.

        If one decides to take this step, there are many more decisions to make. There are a variety of incorporation types to choose from. They each have their advantages and should be chosen carefully. It will have lasting consequences and cannot be easily changed. Our next few posts will discuss these choices to highlight the differences.

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