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 specific 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. Without incorporation, the personal property of business owners is at stake should the company become unable to pay its debts. A corporation also allows creditors in the Neosho 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 corporations charter requires that ownership be divided into stakes or "shares" of stock, all of equal size. This makes the process of transferring control much more practical.
Costs of Incorporation
Incorporation can be costly. First, a modest filing fee may be charged in Missouri 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 Neosho lawyer.