by Longrobante
In addition, if the owner decides to discontinue the business, as a sole proprietorship, the owner just has to stop doing business. Corporations and llcs have to go through a formal dissolution and winding up process.
Another good time to consider forming a corporation or llc is when a sole proprietor wants to bring in a business partner as a co-owner. General partnerships have the same disadvantages as sole proprietorships – in particular, personal liability for the business’ debts. In addition to affording liability protection, corporations and llcs make it easier to tell who owns how much, who has the decision making authority, etc. Businesses that have or expect to have employees should incorporate before hiring them. Employers are generally liable for their employee’s actions and mistakes that are taken in the course of their employment. If you run your business as a sole proprietorship, you as an individual are liable and your personal assets are at risk. However, if you have incorporated, the corporation or llc is the employer and takes on this liability risk.
Both corporations and llcs allow owners to separate and protect their personal assets. In a properly structured and managed company, owners should have limited liability for business debts and obligations. Also, foreign qualified corporations are subject to taxes and annual report fees from both the state of incorporation and the qualifying state. To start the process of incorporating, contact the secretary of state or the state office that is responsible for registering corporations in your state. Ask for instructions, forms and fee schedules on business incorporation.
It is possible to file for incorporation without the help of an attorney by using books and software to guide you along. Your expense will be the cost of these resources, the filing fees, and other costs associated with incorporating in your state. Once you know you’re starting a business, you’ll find that there are many incentives for company incorporation in Hong Kong earlier in the process. You will be able to sign contracts and other documents in the corporation’s or llc’s name and take far greater advantage of the limited liability and other benefits incorporation can offer. One downside to forming a corporation or llc is that it is more expensive than operating as a sole proprietorship.
If the company is a limited liability company, the shareholders' liability, should the company fail, is limited to the amount, if any, remaining unpaid on the shares held by them. A company is a separate legal entity and, therefore, is separate and distinct from those who run it. Only the company can be sued for its obligations and can sue to enforce its rights. It's possible that being incorporated may actually be a tax disadvantage for your business. As a sole proprietor, you may be able to claim tax credits a corporation could not.
Another good time to consider forming a corporation or llc is when a sole proprietor wants to bring in a business partner as a co-owner. General partnerships have the same disadvantages as sole proprietorships – in particular, personal liability for the business’ debts. In addition to affording liability protection, corporations and llcs make it easier to tell who owns how much, who has the decision making authority, etc. Businesses that have or expect to have employees should incorporate before hiring them. Employers are generally liable for their employee’s actions and mistakes that are taken in the course of their employment. If you run your business as a sole proprietorship, you as an individual are liable and your personal assets are at risk. However, if you have incorporated, the corporation or llc is the employer and takes on this liability risk.
Both corporations and llcs allow owners to separate and protect their personal assets. In a properly structured and managed company, owners should have limited liability for business debts and obligations. Also, foreign qualified corporations are subject to taxes and annual report fees from both the state of incorporation and the qualifying state. To start the process of incorporating, contact the secretary of state or the state office that is responsible for registering corporations in your state. Ask for instructions, forms and fee schedules on business incorporation.
It is possible to file for incorporation without the help of an attorney by using books and software to guide you along. Your expense will be the cost of these resources, the filing fees, and other costs associated with incorporating in your state. Once you know you’re starting a business, you’ll find that there are many incentives for company incorporation in Hong Kong earlier in the process. You will be able to sign contracts and other documents in the corporation’s or llc’s name and take far greater advantage of the limited liability and other benefits incorporation can offer. One downside to forming a corporation or llc is that it is more expensive than operating as a sole proprietorship.
If the company is a limited liability company, the shareholders' liability, should the company fail, is limited to the amount, if any, remaining unpaid on the shares held by them. A company is a separate legal entity and, therefore, is separate and distinct from those who run it. Only the company can be sued for its obligations and can sue to enforce its rights. It's possible that being incorporated may actually be a tax disadvantage for your business. As a sole proprietor, you may be able to claim tax credits a corporation could not.
