Illinois 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 Illinois, and they must be completed in conformity with particular guidelines.
Benefits of Incorporation in Illinois
Certain benefits inure to a business in Illinois that has incorporated over one that has not. First, a corporation's liabilities can never go beyond the amount invested in the business by the owners. Without incorporation, the personal property of business owners is at stake should the company become unable to satisfy its debts. Furthermore, a business that has not incorporated puts the unnecessary burden on creditors in the Centreville area to evaluate the credit worthiness of individual owners rather than that of the business, making loans more cumbersome. Finally, the ownership of a corporation is divided into an abundance of equal portions or "shares" of stock. Without this mechanism, transferring ownership of a business would be impractical.
Costs of Incorporation
There are costs associated with incorporation, both short and long term. First, businesses in Illinois may be charged a fee to incorporate. Also, a corporation is taxed as its own entity. The incomes of owners as individuals are also taxed of course, meaning that income to the corporation may be subject to double taxation. However, this disadvantage can be avoided with proper planning and help from a local Centreville lawyer.