By Washington law, a business that has incorporated is identified thereafter as its own legal entity. This means that the business can buy or sell property, offer and accept contracts and exercise legal rights in its own name. The Washington Secretary of State receives and processes applications for incorporation, which must be submitted in compliance with local guidelines.

Benefits of Incorporation in Washington

Benefits of incorporation are many. The primary benefit is that the liabilities of the business can only be satisfied by the assets specifically invested into the company by the owners. Had the business remained unincorporated, owners risk losing their personal property should the business become unable to pay its liabilities. A corporation also allows creditors in the Airway Heights 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 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, Washington might 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 might avoid this disadvantage with proper planning and assistance from a local Airway Heights lawyer.