By Virginia law, a business that has incorporated is recognized thereafter 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. In Virginia, the process of incorporation is begun by filing with the Secretary of State in accordance with particular guidelines.

Benefits of Incorporation in Virginia

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 satisfy its debts. A corporation may also find it easier to finance itself through loans, allowing creditors in the Colonial Heights area to evaluate their investment by assessing the corporation rather than the individual credit-worthiness of its owners. Lastly, 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

There are costs associated with incorporation, both short and long term. First, businesses in Virginia may be charged a fee to incorporate. Also, 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 Colonial Heights lawyer, you can avoid this disadvantage.