Why It's Important To Incorporate Your Business
It seems like everyone is starting a new business or side hustle in 2020. Given the effect of the pandemic on our economy - this is no surprise. I am surprised, however, by the number of people who have yet to “make it official” when it comes to their business or side hustle. Here’s a few reasons to incorporate your business.
Liability - Incorporating your business separates you from the productive service you sell. Why is this important? Business is risky. You want to minimize all personal liability for the work that you do. When business owners don’t separate themselves from their business it leaves them personally responsible if something goes awry.
Tax advantages - There are many daily expenses that can be written off as business expenses like gas, for example.
Funding - There are so many funding opportunities available for registered businesses. Business loans, investors, government contracts, grants, business credit, to name a few. None of the aforementioned are accessible without having at least a registered business and an ein.
Legacy - Consider whether or not you’d like your children to inherit your business. Or, if you’d like your business to become a staple in the community. Incorporating your business is the only way to ensure your business remains viable for generations to come.
Lastly, I will note that there is a mental shift that is made when a business owner incorporates their business. If you run a business that is not incorporated then I would highly encourage you to weigh what you may be missing but not taking the extra step.
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