By Wisconsin law, a business that has incorporated is recognized thereafter as its own legal entity. As a separate entity from the owners, the business is then considered to be functioning on its own when it buys and sells property, assents to contracts and exercises legal rights. To incorporate in Wisconsin, a business must file with the Secretary of State in compliance with certain guidelines.

Benefits of Incorporation in Wisconsin

There are distinct benefits to incorporating a business. Most importantly, liabilities the business accrues may be satisfied only by assets that the owners have specifically invested in it. Without incorporation, the personal property of business owners is at stake should the company become unable to fulfill its debts. Furthermore, a business that has not incorporated puts the unnecessary burden on creditors in the New London area to evaluate the credit worthiness of individual owners rather than that of the business, making loans more cumbersome. Finally, the ownership of a corporation is divided into an abundance of equal portions or "shares" of stock. Without this mechanism, transferring ownership of a business would be impractical.

Costs of Incorporation

These advantages come at a price. First, incorporation in Wisconsin may require a filing fee. Second, a corporation pays taxes just like any other entity. The individual incomes of owners who are paid disbursements from the corporation's earnings are still taxed as well. This is called double taxation, but it can be avoided with proper planning and assistance from a local New London lawyer.