| The Basic of Business Credit |
Just by building a business credit profile you will be able to limit the use of your personal guarantee and build business credit regardless of your personal credit history.
• You will have more cash for the business
• Convenience in purchasing
• Protection of your personal assets from that of the business
• Limit your personal liability from the business
• No need for personal credit checks
• Purchase vehicles with no personal guarantees
• Purchase equipment, computers and more with your business credit
• Preparing your business for future lending needs
Often times starting a business or choosing an investment vehicle can be a confusing task. Incorporating your business or investment can be the best choice you make in determining your financial success. The many benefits of incorporation make it a mandatory first step!
One primary benefit is LIMITED LIABILITY. If you maintain the corporation's legal status properly, and avoid personally guaranteeing the corporation's obligations, your corporation, and not you, would be solely responsible for its own obligations.
The single most important reason people use the corporate form of doing business is to safeguard the personal assets of the owners -- the shareholders (or stockholders) of the corporation -- against potential claims of creditors. Sole proprietors and general partners in a partnership are personally liable for all debts and obligations of the business, such as loans, accounts payable, and defective products. Stockholders typically are not liable for ordinary debts and obligations.
Other potential benefits of incorporating (even for one-person operations):
Corporate identity: the sense of image, stability, sophistication, credibility, and permanence results from incorporating, no matter if you start with one person or several.
Raising capital: you have an inherently enhanced ability to acquire capital. A Corporation gives a potential creditor the impression that you are a knowledgeable professional, and this gives the creditor a whole new outlook on your business.
Continuous life: a corporation can survive its founders, provided it complies with ongoing state and federal paperwork and pays the annual filing fees.
Tax savings: corporations are taxed at a lower rate than individuals. Also, they can own shares in another corporation and receive corporate dividends 80% tax-free.
Call us today and let us take your business to the next level! |
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