THE PROS AND CONS OF INCORPORATING

Under California Law, a corporation is a separate entity. Each entity will stand on its own. A corporation, if adequately set up and maintained, can save you a great deal of time and money. If your corporation is sufficiently capitalized and done correctly, you can shield your personal liability from the corporate liability. However, all of this has to be done correctly.

Corporations can have special tax ramifications. If you are thinking of incorporating, you should talk over the tax ramifications with an accountant. In addition to shielding your personal liability from your corporate liability, a corporate business can still exist after the death of the founders of the corporation. In theory, a corporation can go on indefinitely.

In addition to tax liability, there are costs associated with incorporating. It can become very time-consuming. Once a corporation has been set-up, there are steps that need to be taken to continue to run the corporation such as holding regular meetings and keeping corporate records.