You're about to begin something that will impact your livelihood, your future. You have choices to make, and a little information will help you choose correctly.
First, let's answer a key question:
"Why should you incorporate your business?"
The short answer is one word: "Liability." What this means for a business owner is simple, what is at risk if your business incurred a lawsuit? Despite your best efforts and intentions, accidents can happen, people can feel wronged, and judgements against your business can become a very real and life shattering threat. When it comes to structuring your business, there are two types of liability. As you will see, there are some serious differences between the two.Keep the following in mind as you start planning your business:
UNLIMITED LIABILITY
Unincorporated businesses have unlimited liability. Your personal assets (the house, car, and checking account) are all at risk of being lost if the business is sued.
This risk also includes any liabilities that occur as a result of an employee's or co-owners' actions. This means your personal assets are in danger for an act you did not personally commit!
Incorporated businesses have limited liability. The business is considered separate from the owner(s). As such, only your business assets are at risk during a lawsuit.
Business assets are simply, what you have put into the business (company equipment and property, business bank accounts, etc.)
Unless you knowingly commit a crime, you typically cannot be found personally liable for the actions of the business.
Not all states were created equal, some offer more protection than others. Contact us today to find out if a Nevada or Wyoming corporation is right for you.
