When you start up a new business, you have a number of business formation options. Small business owners choose a sole proprietorship since it is the easiest to set up. However, there are several big advantages to incorporating. Here are three reasons to consider it.
- Tax savings – Self-employment tax is basically a double tax on a sole proprietor for social security and Medicare. You pay your half and the company’s half. Incorporating allows you to separate your personal income from business profit and allows you to avoid this additional taxation.
- Protect your privacy – You don’t want to list your personal cell number and home address for your business. Keep your private info unlisted and set up a separate number and address for the corporation.
- Protect your assets – If a sole proprietor gets into financial trouble, everything from the car to the house could be at risk. If you incorporate, you protect your personal assets from the company’s creditors (assuming business dealings are kept on the level because there is a precedent for going after an entrepreneur’s personal assets if he or she is breaking the law).
Help with Business Formation in Southern California
Pokala Law APC takes the guesswork out of forming a new business properly. We’re a small business too, so we understand your needs and can work with your budget. For affordable and dependable small business legal services, call us today at 1-844-695-1487 or request an appointment online.