For businesses seeking identification as separate legal entities, Mississippi law allows them to undergo the process of incorporation. This means that the business can 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 particular guidelines.
Benefits of Incorporation in Mississippi
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 Greenville area usually 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. Finally, 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 comes at a price. First, Mississippi might charge a filing fee to process applications for incorporation. Also, the corporation will pay taxes 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 Greenville lawyer, you can avoid this disadvantage.