Idaho law allows a business to incorporate and be recognized as its own legal entity. An incorporated business acts in its own name, whether buying and selling property, assenting to contracts or exercising legal rights. The office of the Secretary of State is the agency that receives applications for incorporation in Idaho, and they must be completed in conformity with particular guidelines.
Benefits of Incorporation in Idaho
An incorporated business enjoys certain benefits, the most important being a limit of liability for the shareholders. The most shareholders can lose is the amount they invest in the business. With unincorporated businesses, personal property of owners can be liquidated in order to satisfy the liabilities of the business. A corporation may also find it easier to finance itself through loans, allowing creditors in the Preston area to evaluate their investment by assessing the corporation rather than the individual credit-worthiness of its owners. Lastly, the ownership stake in a corporation can be apportioned into uniform slices, known as "shares" of stock. This makes it possible to sell ownership investments in more manageable slices.
Costs of Incorporation
Incorporation can be costly. First, a modest filing fee may be charged in Idaho for any business that wants to incorporate. Also, a corporation is taxed as its own entity. The individual incomes of the owners are still taxed also, and this can mean the same income is taxed twice, known as double taxation. With proper planning and assistance from a local Preston lawyer, you can avoid this disadvantage.