In Missouri, businesses are allowed to incorporate, thereby becoming their own legal entities. An incorporated business acts in its own name, whether buying and selling property, agreeing to contracts or exercising legal rights. The office of the Secretary of State is the agency that receives applications for incorporation in Missouri, and they must be completed in conformity with specific guidelines.
Benefits of Incorporation in Missouri
A corporation enjoys advantages that unincorporated companies do not. Primarily, it cannot be held accountable for an amount of debt greater than the value of the assets that the owners have invested in it. 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. Also, creditors in the Carthage area generally 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. Lastly, the ownership of a corporation is divided into an abundance of equal portions or "shares" of stock. Without this mechanism, transferring ownership of a business would be impractical.
Costs of Incorporation
Along with a possible fee to apply for incorporation in Missouri, there are other costs that corporations incur. The most important is that a corporation is taxed 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 Carthage lawyer, you can avoid this disadvantage.