For businesses seeking recognition 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, assenting to contracts or exercising legal rights. The office of the Secretary of State is the agency that receives applications for incorporation in Ohio, and they must be completed in conformity with specific guidelines.
Benefits of Incorporation in Ohio
A corporation enjoys benefits 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 pay its debts. A corporation also allows creditors in the Ravenna area to assess the credit worthiness of the business as a whole rather than that of its owners, allowing the business to obtain loans more easily. Lastly, 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
Along with a possible fee to file for incorporation in Ohio, there are other costs that corporations incur. The most important is that a corporation is taxed 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 Ravenna lawyer, you can avoid this disadvantage.