When you start a business you’re creating something useful for the world around you. Your hard work not only brings passion and purpose, but it also could set you and your family up for the rest of your lives. Of course, that’s only if you approach your business in a thorough and sustainable manner.
Some businesses are up and running well before moving to incorporate. Incorporating your business should be high on the priority list once you get the ball rolling. Waiting to incorporate your Florida business could ultimately cost you more than just the business you started. There are numerous benefits to doing this sooner rather than later.
Protecting Personal Assets
When you operate an unincorporated business you’re exposing everything you’ve worked for to liability. If something goes wrong and someone files a lawsuit against your business they’re filing the lawsuit directly against you. This means your home, your car, and other important assets could be used to cover the cost of the lawsuit.
Incorporating your business puts a wall between your business and your personal assets. For example, if you form a Limited Liability Corporation (LLC) and someone files a lawsuit against your business then only the business assets owned under the LLC can be used to pay for the lawsuit.
Protecting Your Identity
To follow up on the above, when you incorporate your business, you are often able to keep your identity and the identity of other owners/shareholders private. This means when there’s an issue with the business or a lawsuit is filed the individual won’t have access to your identity. This prevents others from filing lawsuits directly against you.
Save Money on Taxes
If you haven’t incorporated yet then all the money moving in and out of your business faces taxation. This could include local, state, AND federal taxes. Nobody enjoys paying their taxes, and you actually don’t have to pay all those taxes when you incorporate your business.
Subchapter Corporations (commonly known as S Corporations or S Corps) have pass-through taxation. While your small business will still pay taxes, you won’t face double taxation for income tax. Instead of paying a corporate federal tax, the profits and losses of the business pass through to the owner and are reported on your own personal tax returns. If there are multiple shareholders then the profits and losses are divided among them and each shareholder reports their portion on their own personal tax return.
Work With an Experienced Attorney
Incorporating your business is an important and often imperative step in growing your small business. There are numerous rules, regulations, and fees you need to be aware of during this process. Our team has extensive experience handling incorporations and can make sure the formation of your Florida corporation is airtight. Contact us today and take your business to the next level.
Law Office of Ray Garcia, P.A.
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