Incorporation

Incorporation is the legal process of forming a corporation, which is a distinct legal entity separate from its owners (shareholders). When you incorporate a business, it becomes a corporation under the state's laws, giving the company its own rights and responsibilities.

Some key points about incorporation include:

1. Limited Liability: One of the main advantages of incorporating is that it provides limited liability protection to its owners. This means that the personal assets of the shareholders (owners) are generally protected from the corporation’s debts and legal liabilities.
2. Ownership and Shares: A corporation can issue shares of stock, allowing ownership to be divided among shareholders. This can make it easier to raise capital by selling shares to investors.
3. Perpetual Existence: Unlike a sole proprietorship or partnership, a corporation continues to exist even if the owners or shareholders change. The corporation remains in business unless formally dissolved.
4. Taxation: Corporations are subject to specific tax rules, which can vary based on their structure (e.g., C-corp, S-corp). For example, C-corporations are taxed separately from their owners, whereas S-corporations allow for "pass-through" taxation, where income is passed directly to shareholders, avoiding double taxation.

At WHY PAY AN ATTORNEY, we can help guide you through the incorporation process, from choosing the right type of corporation for your needs (e.g., C-corp, S-corp, LLC) to filing the necessary paperwork and ensuring compliance with all legal requirements. Our goal is to help you start your business with the right legal foundation to grow and succeed.