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
Benefits 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 instead remained a collection of the owners' personal assets, the personal property of the stakeholders could be liquidated to pay the liabilities of the business, if it runs into financial issues. Furthermore, a business that has not incorporated puts the unnecessary burden on creditors in the Connersville area to evaluate the credit worthiness of individual owners rather than that of the business, making loans more difficult. Finally, 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
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 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 Connersville lawyer, you can avoid this disadvantage.