For businesses seeking identification as separate legal entities, Ohio 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. In Ohio, the process of incorporation is begun by filing with the Secretary of State in accordance with specific guidelines.
Benefits of Incorporation in Ohio
There are distinct advantages to incorporating a business. Most importantly, liabilities the business accrues may be satisfied only by assets that the owners have specifically invested in it. Without incorporation, the personal property of business owners is at stake should the company become unable to pay its debts. A corporation also allows creditors in the Deer Park area to assess the credit worthiness of the business as a whole rather than that of its owners, allowing the business to acquire loans more easily. 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 can be costly. First, a modest filing fee might be charged in Ohio for any business that wants to incorporate. Also, a corporation is taxed as its own entity. In other words, the profits a corporation makes are now taxed separately, while any disbursements to shareholders are taxed as individual income. This is called double taxation. However, a business might avoid this disadvantage with proper planning and assistance from a local Deer Park lawyer.