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 VirginiaBusiness.com, 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

Melissa Clark
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Melissa Clark

Head of Content & Customer Marketing at Incfile
Melissa sets the vision for Incfile's content marketing and customer relationship management. Melissa has more than 10 years experience in various marketing roles, and a passion for supporting small businesses as they incorporate and grow. She loves sharing information that will help business owners maximize their LLCs, Corporations and Nonprofits. In her spare time, Melissa is an active member of The Junior League and enjoys running half marathons.
Melissa Clark
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