What does it mean to incorporate an existing business?

Incorporating a business means turning your sole proprietorship or general partnership into a company formally recognized by your state of incorporation. When a company incorporates, it becomes its own legal business structure set apart from the individuals who founded the business.

Why would a sole proprietor want to incorporate itself?

Reasons to Incorporate When you incorporate your sole proprietorship, you’re no longer personally liable for business debts or lawsuits. Instead, the liability switches to the corporation, allowing you to protect your personal assets from potential damages.

What are the advantages of a corporation over a sole proprietorship?

A corporation has the unique advantage of true separation of the owner with the business. This means that the corporation files a separate tax return from its shareholders. In contrast, there is less separation of the business from its owner in a sole proprietorship or partnership structure.

Is it easy to change from sole proprietorship to Corporation?

There are many things to consider when looking at switching your business from a Sole Proprietorship to a Corporation . If you decide to incorporate, the great news is that the process to switch from one to the other is pretty straightforward and easier than you think.

How is an incorporated contractor different from a sole proprietorship?

As an incorporated contractor, you a shareholder in a corporation and you are not responsible for the debts of the corporation unless you have given a personal guarantee. Unlike a sole proprietorship, a corporation has an unlimited life span.

Can a sole proprietorship register a business name?

As a Sole Proprietorship, your business name has absolutely no name protection against any business start-ups registering your business name after you have registered.

What do I need to incorporate my business?

If you’ve considered the pros and cons and decided that you want to incorporate, you’ll need to prepare articles of incorporation and file them with the state. Each state has its own rules about how to incorporate, but here is some basic information you’ll need: 1. Your Business Name