Being a corporation can help you enjoy very many benefits. A major advantage of corporations is that they have limited liability. Corporations ensure that shareholders are provided limited liability protection. This means the shareholders will not be responsible for the debts and liabilities of the business. If the business delays in paying the debtors, the personal property of shareholders is never used. This cannot be compared to a company with no formation. In this case, the shareholders are the ones that pay for the debts of the business.
Corporations are always able to enjoy various tax benefits. For instance your business will enjoy deduction of health insurance premiums. Health insurance premiums are premiums paid on behalf of shareholders and the employees. The corporate income they earn and the savings that apply on self-employment taxes are not taxable. Compensation for workers and Medicare taxes will also be liable to taxation. This is why it is advisable to make your business a corporation. Another tax benefit you can enjoy from a corporation is that dividends and capital gains are exempted from taxation. You can also hire a tax advisor if you want to understand all the tax advantages you will enjoy as a corporation.
Establishing credibility is also an added advantage of becoming a corporation. This is due to the fact that potential customers and vendors will be able to trust your business more. Getting an unlimited life is one of the main advantages of corporations. Ownership can also be passed from one person to the other in this case. The life of a company is not solely dependent on the owners of the business. This means becoming a corporation your company will have the characteristics of unlimited life. When the owner of your business sells his interest, your business will still remain in operation.
Enhancing the transfer of ownership is an added advantage of becoming a corporation. After becoming a corporation you will be able to gain ownership. Easy raising of capital is another benefit of corporations. When you need to raise money for various reasons you can do it easily when you are a corporation. In this case you can achieve this by selling stock. To raise capital, you will be able to sell shares and issue bonds. As a corporation, it can become very easy to get a loan from banks. You can also be able to develop retirement plans easily after company formation. Another advantage of corporations is that profits and losses are shared through to all the shareholders. This is due to the fact that as a corporation you will not be paying incoming taxes. As a corporation you will have a chance of enjoying all the above benefits.