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 particular guidelines.
Benefits of Incorporation in New York
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. Without incorporation, the personal property of business owners is at stake should the company become unable to satisfy its debts. A corporation might also find it easier to finance itself through loans, allowing creditors in the Pelham Manor area to evaluate their investment by assessing the corporation rather than the individual credit-worthiness of its owners. Finally, 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
These benefits come at a price. First, incorporation in New York may require a filing fee. Second, a corporation pays taxes just like any other 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 Pelham Manor lawyer.