Reduce startup stress with incorporation

Entrepreneurs who are starting a company know there are many things to worry about – from effectively marketing products to finding the right employees. But potential lawsuits and loss of personal property might not have to be a concern for business owners who incorporate their companies.

The corporate veil is hard for plaintiffs to pierce. According to a report from, a court refused to impose liability on a shareholder of a business for an improper corporate sale of property. The judge said the company – not the selling agent – was responsible.

As this court case illustrates, limited liability is a major advantage of business incorporation. Forming an LLC – or a number of other entities – can protect founders’ assets, and it also limits shareholders’ liability to the funds they invest in the company.

At the same time, the company itself is guaranteed the same rights of an individual. Corporations are capable of filing lawsuits or owning property. In fact, corporations can have more advantageous tax benefits than individuals. For instance, incorporated businesses can have lower tax rates, more flexibility in deduction benefits and the option of tax deferral.

Protecting personal finances might be an especially important consideration in trying times as it could make business owners more daring in their endeavors. According to a report from the Kauffman Foundation, entrepreneurs’ fear of risk-taking is one of the greatest barriers to startup success.ADNFCR-3052-ID-19695368-ADNFCR