For businesses seeking recognition as separate legal entities, Missouri law allows them to undergo the process of incorporation. This means that the business may buy or sell property, offer and accept contracts and exercise legal rights in its own name. In Missouri, the process of incorporation is begun by filing with the Secretary of State in accordance with particular guidelines.

Benefits of Incorporation in Missouri

A corporation enjoys benefits 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 problems. A corporation may also find it easier to finance itself through loans, allowing creditors in the Festus area to evaluate their investment by assessing the corporation rather than the individual credit-worthiness of its owners. Lastly, a corporation's ownership stake is divided into equal slices or "shares" of stock, which make investments in the business much easier to transfer.

Costs of Incorporation

These advantages come at a price. First, incorporation in Missouri may require a filing fee. Second, a corporation pays taxes just like any other 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 Festus lawyer.