What Is: Business Incorporation?
Business incorporation is a way to formally register your brand, product or services with the state. This allows your work to become a completely separate entity from yourself and in some cases gives you legal protection from creditors who may want to seize your personal assets.
Benefits of Incorporating Your Brand:
The main benefit of business incorporation is the ability to be exempt from liability in regards to your personal assets. This means, if you have a negative situation where the business owes money, your collectors can not go after your personal income, only that of the business.
Types of Business Incorporation:
The main types of incorporation are a Limited Liability Company Company, an S-Corporation and a C-Corporation. A Limited Liability Company allows you to create members for your business which act as the owners. In a LLC, a member can be an owner and an operator, which means they can also manage the day-to-day responsibilities of running the business.
In a S-Corporation, the business owners are taxed on the earnings of the company which are passed through to their personal income. This means they are not taxed on both their income from the business and the business income itself.
In a C-Corporation, the owners are called shareholders and they elect a board of directors to oversee the corporation, which is run by officers (CEO, COO, CMO, etc). They can create multiple structures to share the business ownership, including assigning different types of stock.
For more information on the differences between corporations, go to: https://www.mycorporation.com/learningcenter/llc-vs-corporation.jsp
How To Incorporate Your Brand:
- Identify what type of incorporation best serves your business
- Choose what state you want to incorporate
- Go to the Department of State website for your state
- Pay the filing fee ($50-$250)
To find the department of state website to incorporate your brand, go to: https://www.irs.gov/pub/irs-tege/state_incorporation_sites_np.pdf