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
There are distinct benefits to incorporating a business. Most importantly, liabilities the business accrues may be satisfied only by assets that the owners have specifically invested in it. With unincorporated businesses, personal property of owners can be liquidated in order to satisfy the liabilities of the business. A corporation also allows creditors in the Macon area to assess the credit worthiness of the business as a whole rather than that of its owners, allowing the business to obtain loans more easily. 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
There are costs associated with incorporation, both short and long term. First, businesses in Missouri may be charged a fee to incorporate. Also, 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 Macon lawyer, you can avoid this disadvantage.