By Wisconsin law, a business that has incorporated is identified thereafter as its own legal entity. As a separate entity from the owners, the business is then considered to be operating on its own when it buys and sells property, assents to contracts and exercises legal rights. The Wisconsin Secretary of State receives and processes applications for incorporation, which must be submitted in compliance with local guidelines.

Benefits of Incorporation in Wisconsin

An incorporated business enjoys certain advantages, the most important being a limit of liability for the shareholders. The most shareholders can lose is the amount they invest in the business. If the business had remained a personal asset of the owners, they could run the risk of losing their personal property to pay for the company's financial liabilities in case of default. Furthermore, a business that has not incorporated puts the unnecessary burden on creditors in the Sturgeon Bay area to evaluate the credit worthiness of individual owners rather than that of the business, making loans more difficult. Finally, 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 comes at a price. First, Wisconsin might charge a filing fee to process applications for incorporation. Also, the corporation will pay taxes as its own entity. The incomes of owners as individuals are also taxed of course, meaning that income to the corporation might be subject to double taxation. However, this disadvantage can be avoided with proper planning and help from a local Sturgeon Bay lawyer.