Register Corporation

2008-11-20 12:33:00

( Health )



You will have to register you business for it to be recognized as a legal entity. When registering a business, you will be faced with the decision of whether to use sole proprietorship, partnership, limited liability corporation or a corporation. When you register corporation, you will enjoy some benefits over the other forms.

If you own a sole proprietorship company, the legal entity of the company is tied to your individual entity. All your assets are tied to the company. In case a business goes bankrupt, even your private property can be confiscated to pay for all the company's debts.

On the other hand, if you register corporation, you form a separate legal entity. That means the corporation's assets and liabilities are separate from your personal assets and liabilities. If the company goes bankrupt, your properties will be protected as they won't be the property of the corporation.

The government also favors corporations and this entity enjoys generous tax breaks from IRS. The idea is that there are more people benefiting a corporation since it is owned by more people than a sole proprietorship company.

There are also some disadvantages to register corporation. Decision making will not be your prerogative but you will have to consult with the incorporators. This can be a disadvantage if you know the business more than anyone else while the other incorporators just want to meddle.

Of course two head can be better than one and analyzing the feasibility of everyone's suggestions may help the company although it would take a little bit more time. The decision making can be detailed in the articles of incorporation to make clear that there will be individuals with more decision making powers over the others.

Having everything in writing will make the operation of the business run more smoothly and misunderstandings can be avoided.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.