You're about to begin something that will impact your livelihood, your future. You have choices to make, and a little information goes a long way. First let's answer a key question:

"Why should you incorporate your business?"

The short answer is one word: "Liability." What this means for a business owner is simple: what is at risk if your business incurred a lawsuit? Despite your best efforts and intentions, accidents can happen, people can feel wronged, and judgements against your business can become a very real and life shattering threat. When it comes to structuring your business, there are two types of liability. 


UNLIMITED LIABILITY

Businesses that risk Unlimited liability include:
  • Unincorporated businesses have unlimited liability. Your personal assets (the house, car, and checking account) are all at risk of being lost if the business is sued.
  • This risk also includes any liabilities that occur as a result of an employee's actions. This means your personal assets are in danger for an act you did not personally commit!  
     
  • Business structures that risk unlimited liability include sole proprietorships and general partnerships
  • If you are running a business that has not been registered or incorporated, you are operating a sole propertorship and are subject to unlimited liability. 


LIMITED LIABILITY

  • Incorporated businesses have limited liability. The business is considered separate from the owner(s). In other words, only your business assets are at risk during a lawsuit.
     
    • Business assets are what the owners have put into the business. This include company property, equipment, and business bank accounts. 
       
  • Unless you knowingly commit a crime, you typically cannot be found personally liable for the actions of the business or your fellow owners.
     
  • Business structures that provide limited liability include
    Corporations, Limited Liability Companies (LLCs), and Limited Partnerships (LPs).

Incorporate Today

INC.jpg

Corporation

shutterstock_463841831.jpg

LLC