In Kansas, 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. A business looking to incorporate in Kansas must file with the Secretary of State in accordance with established guidelines.
Benefits of Incorporation in Kansas
There are distinct advantages to incorporating a business. Most importantly, liabilities the business accrues may be satisfied only by assets that the owners have specifically invested in it. If the business had remained a personal asset of the owners, they could run the risk of losing their personal property to pay for the company's financial liabilities in case of default. Also, creditors in the Beloit area typically prefer to deal with corporations, since a loan is an investment more easily evaluated when the credit-worthiness of various owners is not an issue. Finally, a corporations charter requires that ownership be divided into stakes or "shares" of stock, all of equal size. This makes the process of transferring control much more practical.
Costs of Incorporation
These benefits come at a price. First, incorporation in Kansas may require a filing fee. Second, a corporation pays taxes just like any other entity. In other words, the profits a corporation makes are now taxed separately, while any disbursements to shareholders are taxed as individual income. This is called double taxation. However, a business might avoid this disadvantage with proper planning and assistance from a local Beloit lawyer.