In Indiana, 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. A business seeking to incorporate in Indiana must file with the Secretary of State in accordance with established guidelines.
Benefits of Incorporation in Indiana
Certain benefits inure to a business in Indiana 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. With unincorporated businesses, personal property of owners can be liquidated in order to satisfy the liabilities of the business. Furthermore, banks in the Lake County area prefer to evaluate the credit worthiness of a business as a whole rather than that of individual owners. This makes the process of obtaining corporate loans simpler. Finally, ownership of a corporation is divided into equal portions or "shares" of stock, which may be bought and sold much more easily than the ownership of an unincorporated business.
Costs of Incorporation
Incorporation comes at a price. First, Indiana may 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 may be subject to double taxation. However, this disadvantage can be avoided with proper planning and help from a local Lake County lawyer.