Forming A Real Business Has Benefits
Choosing a business structure and creating a separate entity for your business is one of the most important decisions you can make as an entrepreneurial business owner.
Unfortunately, so many people are handing out bad advice about forming/incorporating your business. And... there are misguided lawyers and CPAs suggesting that forming/incorporation as a separate legal entity is not always necessary. If someone has told you this, you will likely hear that there are no tax benefits for you or that you do not really need it.
Why is this bad advice?
if you are serious about building a business, you form/incorporate that business based on where you want to go with your business, not where you are right now.
If you want to stay where you are right now, do not form/incorporate and remain a sole proprietor.
But of course, you don’t want that.
You want to build a sustainable business that makes lots of money and minimizes your risk.
So, you form/incorporate. An LLC is the most popular legal entity but may not be the best one for you. Give us a call if you need help deciding which is right for you. We’ll also help you choose where to form your entity. Your home state may be right, but sometimes it’s better to incorporate elsewhere. Even if you do register your business in a different state, you must be prepared for defending suits out-of-state, hiring a Registered Agent in that state and more.
Not to mention there are benefits in the form of a reduced risk of tax audit. Did you know, you are 5-7 times more likely to be audited if you are not incorporated than if you are? It’s probably because the government knows that if you are not incorporated, you are not taking your business seriously and likely to be making some mistakes on your taxes too.
Plus, you’ll experience valuable liability protection for your personal assets from incorporating as well, albeit there are other check points that must be adhered to for full limited liability.
If you have not yet formed or incorporated your business, give us a call.
This article is a service of SL DeBarros Law Firm, LLC. We offer a wide array of business legal services and can help you make the wisest business choices throughout life and in the event of your death. We also offer a Business Protection Start-Up Session or a Business Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.