By Washington 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. 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
Advantages 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 satisfy its liabilities. Furthermore, a business that has not incorporated puts the unnecessary burden on creditors in the Anacortes area to evaluate the credit worthiness of individual owners rather than that of the business, making loans more cumbersome. 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
Incorporation can be costly. First, a modest filing fee may be charged in Washington for any business that wants 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 Anacortes lawyer, you can avoid this disadvantage.