In Kansas, businesses are allowed to incorporate, thereby becoming their own legal entities. After incorporation, buying and selling property, agreeing to contracts and exercising legal rights are considered acts of the business itself and not its owners. To incorporate in Kansas, a business must file with the Secretary of State in compliance with particular guidelines.
Benefits of Incorporation in Kansas
Certain advantages inure to a business in Kansas 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. Without incorporation, the personal property of business owners is at stake should the company become unable to satisfy its debts. A corporation might also find it easier to finance itself through loans, allowing creditors in the Junction City area to evaluate their investment by assessing the corporation rather than the individual credit-worthiness of its owners. 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
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. The individual incomes of owners who are paid disbursements from the corporation's earnings are still taxed as well. This is called double taxation, but it may be avoided with proper planning and assistance from a local Junction City lawyer.