Ready to incorporate your business? Whatever you do, don’t do this! There are several ways to organize your business the wrong way. What should you avoid? Read on to find out.
Are you considering incorporation for your business? It can be the best protection you have for your business if you do it right. Don’t fall into the trap of incorporating the wrong way. You could wake up and find you have no protection at all.
Why Incorporate a Business?
There are two main reasons to incorporate your business.
- You need personal protection against business liability.
- You gain tax breaks as an incorporated business.
Makes good sense, right? Here’s the problem: too many people take the wrong steps when filing for incorporation and wind up with no protection at all. The good news is that it’s easy to avoid this problem. Make sure you take the right steps and avoid the blunders.
What Is the Wrong Way to Incorporate a Business?
A common mistake people make when incorporating a business is to file as a corporation or an LLC and then fail to operate as one. Did you know there are rules regarding behavior for an LLC? As a corporation, your business needs to proceed in a way that is different than if you are a sole proprietor.
Another wrong way to incorporate your business is to understand it’s not just a “one and done” kind of deal. Did you know you need to file articles of incorporation if you register as a corporation? With an LLC, it’s referred to as “articles of organization.” You need to submit these documents to the Secretary of State. An LLC requires ongoing compliance. It’s easy. As long know you need to comply and you know how to do that.
What Happens If You Incorporate a Business the Wrong Way?
There’s no easy way to answer this question, because each situation is unique. If something goes wrong, and you don’t have the proper paperwork structured and filed right, you could lose everything. Should your business ever get sued, you cannot bring a defense. If you need to appeal, you might not have that right. Contracts disappear, declared void immediately. Worst case scenario, you could even lose your home and your assets.
There are protocols for every corporation or LLC. If your business has not filed the proper articles, you cannot follow those contracts without the risk of severe legal and financial trouble.
Ready to Know the Right Way to Incorporate a Business?
At Incompass, we’re here to walk you through the six different areas you need to consider when forming an LLC or a corporation. You need six types of protection for your business and these include:
- A tax strategy
- An understanding of how to optimize your benefits as the owner as much as possible
- Protection of your assets to keep a roof over your head.
- A process to deal with several regulatory agencies.
- The right planning and development to grow your business
- An exit strategy, even if you plan to own your business until you stop working.
When you incorporate online or rush through the process without professional help, many things can get overlooked or eliminated from the process. It’s important to keep in mind that the steps are not just hoops to jump through but are legal necessities to get the protection you seek.
When you work with our expert team to incorporate your business, you’ll see there is a lot more involved than an online service requires. That’s because we work through each of the above six steps. You need expert help along the way to provide accurate service and to give you peace of mind.
Our team at Incompass is ready to help you create a legal, structured plan for your business. Let us take the worry and complication out of the process. Contact us today to start the right paperwork to incorporate your business.