Are You Ready to Incorporate?

4 Reasons You May Need to Incorporate

Limited Liability

Need to Raise Money

Extremely Profitable

Time to Retire

You Need Limited Personal Liability

• Sole Proprietor

• No legal separation from business

• Personal Assets not protected from lawsuits and debt

• LLC’s, S Corps, & C Corporations

• Limited personal liability for debt & lawsuits

• Only liable if personally guarantee a loan or personally injure or negligent

Need To Raise Money for Business

• As a Sole Proprietor:

• Unable to sell interest or shares of business for equity

• Have to pledge personal assets for loans

Extremely Profitable

• As a Sole Proprietor:

• Net Income subject to payroll and income tax

• Pay the full 15.3% of Social Security & Medicare Taxes

• As an S Corporation:

• Can reduce taxes

• Pay a fair salary to owner (shareholder)

• Pay as Distributions (not subject to payroll taxes)

Time to Retire

• As a Sole Proprietor:

• Can’t transfer or gift part of the business

• Business dies along with you

• Becomes part of the estate

Ready to Incorporate?

Contact your CPA or Attorney to start the process and discuss your specific situation