Companies and businesses that have been incorporated have always experienced tremendous benefits. there is need to keep your business life separate from your personal; life and incorporating serves the purpose. This article pinpoints the tremendous advantages of incorporating your company.
First and foremost, you will always promote business longevity whenever you incorporate your company or business. There is need to understand that human beings have limited years and it will come a time when you will die. You need to abhor having a sole proprietorship as it will eventually die the moment you die. Company incorporation enables you have heirs to your business and those heirs will always have heirs as long as the company is functional.
The second advantage is the limited liability. The only way you will enjoy and benefit from limited liability is where your personal life and business life are parallel. This means that all your company’s debts remain company debts and you will never be responsible. Where your company is sued or even files bankruptcy, you will never be affected personally whatsoever.
The tax rates for incorporated businesses are always lower. Did you know that sole proprietors are enrolled through a full tax rate? This is a plus for you as you will be paying taxes at low rates and annually.
With an incorporated tax, you could enjoy lawful tax deferrals. Your personal taxes are only for the dividends or the income that you earn. You will never be taxed anything that you haven’t earned. Therefore, you could avoid getting your income from your company and this helps with tax deferrals. This is very different when compared to the sole proprietorship as they will have to file taxes for all the profits.
Losses are part and parcel of companies and businesses and whenever your company incurs losses, you will never be allowed to tax. However, there are businesses like the sole proprietorship that doesn’t allow you to carry the incurred loses forward to the next fiscal year. Nonetheless, you will always benefit from sharing your losses with other fiscal years where your company is incorporated.
Incorporated companies have multiple payment options. For instance, you are to determine whether you will pay your stakeholders via salary or dividends. Whichever option you settle for, your company will benefit. Where you have hired family members, you could have their salary filed as company expenses. Alternatively, you could decide to receive your salaries as dividends which are lowly taxed.
There are so many benefits of incorporating your business. The points above are just but a few. Therefore, you should consider incorporating your business today and enjoy the benefits maximally.