Brooklyn and other New York regions are ideal locations from which to run a successful business. When you decide to enter the business world, one of your first decisions will involve choosing a legal structure for your operation. The two most common structures are corporations and limited liability companies (LLCs).
Each option comes with several advantages and disadvantages. In this post, we will talk about some of the benefits that come with incorporating your operations.
Advantages of forming a corporation
For most, the main benefit of incorporating is keeping your business and personal assets separate from one another. That way, if any legal trouble (lawsuits, etc.) arises, your personal assets remain protected. However, there are other advantages to incorporating your business.
- Business capital. Incorporating gives you better access to capital than other structures provide. For example, you can sell stock in your company to raise money for your business.
- Tax benefits. Some corporations (C corporations) increase the owner’s tax burdens while others may reduce these obligations. Specifically, an S corporation gives shareholders options that may limit their tax burdens.
- Business perpetuity. Those who dream of passing a business down through the generations have the best chance of doing so by incorporating. A corporation allows owners to sell or transfer ownership of the business’s stock easily.
As you might expect, there are a few disadvantages to forming a corporation. It usually costs more to incorporate a business, and the application process is complicated. It also takes effort to maintain a corporation and remain in compliance with New York business laws.
If you are unsure about how to structure your business, consider seeking legal guidance. Doing so ensures that you have considered both the positive and negative implications of the structure you ultimately choose. It is also wise to learn more about our state’s complex business laws.