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. Without incorporation, the personal property of business owners is at stake should the company become unable to pay its debts. A corporation might also find it easier to finance itself through loans, allowing creditors in the Mount Kisco 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
Along with a possible fee to apply for incorporation in New York, there are other costs that corporations incur. The most important is that a corporation is taxed as its own entity. The individual incomes of owners who are paid disbursements from the corporation's earnings are still taxed as well. This is called double taxation, but it may be avoided with proper planning and assistance from a local Mount Kisco lawyer.