For businesses seeking identification as separate legal entities, New York law allows them to undergo the process of incorporation. An incorporated business acts in its own name, whether buying and selling property, agreeing to contracts or exercising legal rights. To incorporate in New York, a business must file with the Secretary of State in compliance with specific guidelines.
Benefits of Incorporation in New York
Certain advantages inure to a business in New York 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. With unincorporated businesses, personal property of owners can be liquidated in order to fulfill the liabilities of the business. A corporation might also find it easier to finance itself through loans, allowing creditors in the Levittown area to evaluate their investment by assessing the corporation rather than the individual credit-worthiness of its owners. Lastly, ownership of a corporation is divided into equal portions or "shares" of stock, which may be bought and sold much more easily than the ownership of an unincorporated business.
Costs of Incorporation
Incorporation can be costly. First, a modest filing fee might be charged in New York for any business that wants to incorporate. Also, a corporation is taxed as its own entity. The incomes of owners as individuals are also taxed of course, meaning that income to the corporation might be subject to double taxation. However, this disadvantage can be avoided with proper planning and help from a local Levittown lawyer.