When Is It Time to Incorporate Your BusinessBrian Jang ON January 21, 2016
For many business owners, the question of whether or not to incorporate is going to come up. And why not? There are many advantages to incorporating a small business. For one, your company can have more credibility with potential lenders, suppliers, customers, investors and employees. There are a host of other benefits as well, including limited personal liability, ability to raise money, employee incentives, transferable ownership, and tax advantages. So, how do you know when it is the right time for incorporation?
When is it time to incorporate?
If you are a first-time business owner, starting up as a sole proprietorship or partnership is usually the safest bet. Eventually, however, as your business starts to grow and is making reasonable profits, you will most likely want to minimize your risks. Incorporation is an effective option to help you do just that. There are a couple of key factors when considering to incorporate a business. If you are working in an industry where the chances of being sued are high—construction for example—it is a good idea to incorporate from the start. From an income tax planning point of view, once you start paying a similar tax rate on your profit level as a company, it is time to incorporate.
Once you have made the decision to incorporate, it is extremely important to seek out professional accounting advice to get your business set up properly. Incorporation requires a high level of paperwork and bookkeeping—and meticulously accurate financial records are a must. Making sure your accounting is in order will make the process run that much smoother.
Why gamble with the financial future of your small business?
When it comes to running a small business, there may eventually come a time when you need think about incorporating. Before you make any major moves, it is always a good idea to consult with a qualified small business accounting service like BCJ Group, Chartered Professional Accountants. We will help you understand all the ins and outs of incorporating your business, helping to put your fledgling company on the road to success.
Still unsure if incorporating is right for you? BCJ Group, Chartered Professional Accountants, is here to help walk you through the logistics of incorporation. Our team of experienced accountants deliver expert accounting advice, helping to ensure your business is ready to make the most informed decisions possible.
For a free consultation, contact us today!