Prestizia Insurance Blog
Do you want to switch to a corporation and leave sole proprietorship or general partnership behind? Many people in the business world consider the corporation as more beneficial than a general partnership or sole proprietorship. It is also not as expensive as you might think.
If you still need some encouragement, here are some benefits that people get when they choose to form a corporation (or Incorporation).
The Advantages of Incorporation
Are There Any Disadvantages?
When it comes to the drawbacks of incorporation, take a look at them below:
Legal Formalities. When you are in a corporation, there are some rules and regulations to follow. These include keeping a correct record of the meetings of shareholders and directors. You also need to stick and adhere to the bylaws made by the company. Moreover, you need to give the stockholders their shares of stock.
Double Taxation. It is required to incorporations, especially when the dividends are distributed to the shareholders. It is possible to avoid double taxation if you declare S corporation tax status in the IRS.
Formation Expenses and Ongoing Costs. States in general, implement ongoing fees on incorporated businesses. This includes franchise tax fees and annual report. Normally, if it is a corporation, it involves a big amount of formation and ongoing expenses.
So, transitioning to a corporation is not a bad thing after all. But, arm yourself with a lot of knowledge about incorporation, as well as buying the right business insurance.
At Prestizia Insurance Group, we take pride in making sure that our clients are well-protected at prices they can afford. To learn more about how we can help you, please contact our agency at (855) 436-6353 or Click Here to request a free quote.