In Indiana, businesses are allowed to incorporate, thereby becoming their own legal entities. This means that the business can buy or sell property, offer and accept contracts and exercise legal rights in its own name. The office of the Secretary of State is the agency that receives applications for incorporation in Indiana, and they must be completed in conformity with particular guidelines.
Benefits of Incorporation in Indiana
A corporation enjoys advantages that unincorporated companies do not. Primarily, it cannot be held accountable for an amount of debt greater than the value of the assets that the owners have invested in it. Without incorporation, the personal property of business owners is at stake should the company become unable to satisfy its debts. A corporation also allows creditors in the Beech Grove area to assess the credit worthiness of the business as a whole rather than that of its owners, allowing the business to get loans more easily. Finally, 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 comes at a price. First, Indiana might charge a filing fee to process applications for incorporation. Also, the corporation will pay taxes as its own entity. The incomes of owners as individuals are also taxed of course, meaning that income to the corporation might be subject to double taxation. However, this disadvantage can be avoided with proper planning and help from a local Beech Grove lawyer.