Under Oklahoma law, a business may incorporate. If it chooses to do so, it is thereafter recognized as its own legal entity. This means that the business may buy or sell property, offer and accept contracts and exercise legal rights in its own name. The Oklahoma Secretary of State receives and processes applications for incorporation, which must be submitted in compliance with local guidelines.
Benefits of Incorporation in Oklahoma
Certain benefits inure to a business in Oklahoma 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. Had the business remained unincorporated, owners risk losing their personal property should the business become unable to pay its liabilities. Furthermore, a business that has not incorporated puts the unnecessary burden on creditors in the Poteau area to evaluate the credit worthiness of individual owners rather than that of the business, making loans more cumbersome. Lastly, a corporation's ownership stake is divided into equal slices or "shares" of stock, which make investments in the business much easier to transfer.
Costs of Incorporation
Incorporation comes at a price. First, Oklahoma may charge a filing fee to process applications for incorporation. Also, the corporation will pay taxes 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 may avoid this disadvantage with proper planning and assistance from a local Poteau lawyer.