By West Virginia 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. The office of the Secretary of State is the agency that receives applications for incorporation in West Virginia, and they must be completed in conformity with certain guidelines.
Benefits of Incorporation in West Virginia
An incorporated business enjoys certain benefits, the most important being a limit of liability for the shareholders. The most shareholders can lose is the amount they invest in the business. With unincorporated businesses, personal property of owners can be liquidated in order to satisfy the liabilities of the business. A corporation also allows creditors in the Ranson Corporation area to assess the credit worthiness of the business as a whole rather than that of its owners, allowing the business to receive loans more easily. 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
There are costs associated with incorporation, both short and long term. First, businesses in West 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 Ranson Corporation lawyer, you can avoid this disadvantage.