If you are a small business owner in Fresno, you have probably thought about incorporating your business.  The process of incorporating isn’t difficult, but the first step in the process is to know why you should.  Below are 5 important reasons why your business should be incorporated:

1. Personal Asset Protection. One of the most important reasons for selecting a corporation as a business entity is personal asset protection for the small business owner. Unlike a sole proprietor who has unlimited personal liability for the obligations of the business, the law sees a corporation and its shareholders as separate legal entities. One of the advantages of this distinction is that you, as a corporate shareholder, are shielded from personal liability from your company’s debt as long as you abide by corporate formalities.
2. Funding & Growth. It is usually much easier to attract new investors into a corporate entity because of limited liability and the ease of transferring shares.
3. Potential Tax Benefits. When you are a sole proprietor, all the profit you earn from your business is subject to self-employment taxes. However, this is not necessarily the case if your business is organized as an S corporation. Consult with your CPA or tax advisor to insure you understand all of the tax benefits that may be available to you.
4. Privacy. When you incorporate, there is an added layer of privacy. While the names of officers and directors are public record, shareholders’ names are not.
5. Credibility. Adding “Inc.” after the name of your company can add instant authority.

Deciding whether or not to incorporate is an important decision, and it’s always best to discuss with your team of professionals to insure incorporating is right for YOUR business.