Have you been advised that you’d be better off incorporating your business? When you started your small business, you may have imagined that it would grow and become large and profitable. If you have been fortunate enough, after years of hard work, your business has grown and its profits are much higher. So, now, is it time to consider business incorporation? What does it mean to have a corporation compared to a sole proprietorship?
Business Incorporation
Business progress and growth can mean that more and more of your customers are happy and satisfied with your product or services. But as the business expands, it is essential to consider some changes to put it in a better position. If incorporation is one of its options, it is best to learn more about it and how it could be good for your business.
What Is Incorporation?
Incorporation means making your business a corporate entity. By doing so, it becomes a separate entity from you, its owner. When incorporated, your business will no longer be under your sole proprietorship nor will it be owned by a partnership. And because incorporating a company is a major step, here are some of the advantages that you should expect to enjoy.
Advantages of Business Incorporation
Limitation in Liability
Running a business comes with a list of responsibilities, and sole proprietorship primarily places most of the responsibilities on you. Naturally, the liability of the business is your responsibility. However, when you decide to incorporate your business, you will be running it as a corporation, with limited liability on your shoulders. When the business is incorporated, you automatically become one of its shareholders. The best part is that you are not liable to pay off any debt as a shareholder. Nobody can sue you for non-payment of debt as the business is considered a separate entity from you.
Better Health Services for Employees
A business that is incorporated can offer its employees private healthcare services and deduct a part of its payment on behalf of the employees. More importantly, as a corporation, your business can provide more benefits to the employees and make it tax-free too. The extra health care services for employees will surely give them more reason to stay and work with the company, minimizing your turnover. Employee retention can help your business grow and become more stable in the future to come.
Increase Capital
Your business operations can entail plenty of costs. From the salary of employees to the overhead expenses including electricity and water services. And as your business grows, the value of operations also increases. When you remain to be a sole proprietor, all the stress of raising the money is on your shoulders. But as a corporation, there is a likelihood of an increase in capital coming from its shareholders. The shares will help finance the business. It is a more straightforward way to raise the share capital that you need for business.
Is Incorporation for You?
Is incorporating your business the best option for you? It depends on the nature of your business and the industry that you are in. Each situation is different. To make the best decision, consult with an experienced accounting firm like ATS Accounting and Tax Edmonton. We can help you get a complete understanding of the nature of your business and its current value.
ATS Accounting and Tax Edmonton has experienced accountants and financial consultants who will help you manage your business’s financial tasks. Our team of dedicated experts knows the specific risks you may face and help ensure your business is protected. At ATS Accounting and Tax Edmonton, we provide customized accounting solutions and business growth strategies. Our highly experienced team of financial experts helps keep your books in order and provides up-to-date accurate records and reports so you can have the necessary insights you need to make the right decisions to grow your business. Ready to get started? For more information about our accounting and tax services, book your free 15-minute consultation by calling us at 780-484-4006 or contacting us online. We are located at 10021 170 Street NW between Stony Plain Rd and 100 Avenue NW.
