So in the US each month there are a total of 500 new businesses started each month and so that being the case the question is raised if you are one of those new businesses or already have your own existing business should you incorporate your business? Great question let’s investigate the answer the answer.
What happens if you do not incorporate your business? Centuries ago, if someone started a business and that business borrowed money and then defaulted on any loans or was found liable of wrongdoing then that business owner could actually find themselves in jail and have their whole family sold as servants or slaves to then pay for the judgment brought against their business. Nowadays the legalities that exist are much more lenient than those back centuries ago, so thank goodness. In any event, this situation led to the creation of the “corporation” in England and Europe which was partly responsible for the pilgrims and other explorers and enterprises taking the necessary risks to explore the western hemisphere.
Although life has improved immensely and risks like those are not nearly as great today as they were back then there are similar risks that come to light when you start a business so to be clear if you want to should less risk and liability then it is imperative that you start a business by incorporating the business first. In the US most new entrepreneurs opt to create a “limited liability company,” which can work very well due to the flexibility that a LLC has for new business owners.
If you do not incorporate your business and run it as a “sole proprietor,” then you inherit risks and liabilities by running your business that way, namely if your business is found liable to its clients and customers then the possibility for a judgment that would not only put you out of business, but also lead to personal bankruptcy and forfeiture of nearly all assets owned remains a strong possibility so for the same of everything you have worked hard to accumulate it is highly recommended that you incorporate your business.
We have referred many entrepreneurs to www.MyCorporation.com they are very affordable, very fast and truly help business owners.