In Massachusetts, businesses are allowed to incorporate, thereby becoming their own legal entities. When an incorporated business acts, whether it is to buy and sell property, assent to contracts or exercise legal rights, the process is then attributable to the business itself and not its owners. To incorporate in Massachusetts, a business must file with the Secretary of State in compliance with specific guidelines.

Benefits of Incorporation in Massachusetts

Certain benefits inure to a business in Massachusetts 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 pay its debts. Furthermore, a business that has not incorporated puts the unnecessary burden on creditors in the Easthampton area to evaluate the credit worthiness of individual owners rather than that of the business, making loans more cumbersome. Lastly, 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 can be costly. First, a modest filing fee may be charged in Massachusetts for any business that wants to incorporate. Also, a corporation is taxed as its own entity. Disbursements to the owners of the corporation are also taxed as individual income, so this means earnings may be taxed twice. But this double taxation can be avoided with proper planning and help from a local Easthampton lawyer.