In Illinois, businesses are allowed to incorporate, thereby becoming their own legal entities. This means that the business may buy or sell property, offer and accept contracts and exercise legal rights in its own name. The Illinois Secretary of State receives and processes applications for incorporation, which must be submitted in compliance with local guidelines.
Benefits of Incorporation in Illinois
Advantages of incorporation are many. The primary benefit is that the liabilities of the business can only be satisfied by the assets specifically invested into the company by the owners. Had the business remained unincorporated, owners risk losing their personal property should the business become unable to pay its liabilities. Furthermore, a business that has not incorporated puts the unnecessary burden on creditors in the Robbins area to evaluate the credit worthiness of individual owners rather than that of the business, making loans more cumbersome. Lastly, a corporation's ownership stake is divided into equal slices or "shares" of stock, which make investments in the business much easier to transfer.
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 Robbins lawyer.