For businesses seeking recognition as separate legal entities, Mississippi 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. The office of the Secretary of State is the agency that receives applications for incorporation in Mississippi, and they must be completed in conformity with certain guidelines.

Benefits of Incorporation in Mississippi

Certain benefits inure to a business in Mississippi 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 fulfill its debts. A corporation may also find it easier to finance itself through loans, allowing creditors in the Columbia area to evaluate their investment by assessing the corporation rather than the individual credit-worthiness of its owners. 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

Along with a possible fee to file for incorporation in Mississippi, 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 Columbia lawyer, you can avoid this disadvantage.