Legal Benefits of Incorporating in the US and Abroad

A business can take on different forms all over the world. In almost all parts of the world incorporation is a common type of entity. With it come benefits related to taxes, liabilities and more. The following summarizes these:

udgements. In a corporation, however, stockholders, directors and officers typically are not liable for their company's debts and obligations. They are limited in liability to the amount they have invested in the corporation (eg: If $100 in stock was purchased, no more than $100 can be lost). Corporations and Limited Liability Companies (LLCs) may also hold personal assets like houses, cars or boats. If one is personally involved in a lawsuit or bankruptcy, these assets may be protected. A creditor of the owner of a corporation or LLC cannot seize the assets of the company, however, they can seize their ownership shares in the corporation, as that is considered a personal asset.

  • Transferable ownership. Ownership in a corporation or LLC is easily transferable to others, either in whole or in part. Some states' laws are particularly attractive to this end. For example, with a Delaware Corporation, the transfer of ownership in a corporation is not required to be filed or recorded.
  • Retirement funds. Retirement funds and qualified retirement plans (like 401ks) may be set up more easily with a corporation. Corporations can also fully deduct the cost of paying its owner's health insurance.
  • Taxation. In the United States, corporations are taxed at a lower rate than individuals. Also, they can own shares in other corporations and receive corporate dividends 80% tax-free. There are no limits on the amount of losses a corporation may carry forward to subsequent tax years. A sole proprietorship, on the other hand, cannot claim a capital loss greater than $3,000 unless the owner has offsetting capital gains.
  • Raising funds through sale of stock. Capital from investors can be raised for corporations easily through the sale of stock.
  • Durability. A corporation is capable of continuing indefinitely. Its existence is not affected by the death of shareholders, directors, or officers of the corporation.
  • Credit rating. Regardless of an owner's personal credit scores, corporations acquire their own credit rating, and build a separate credit history by applying for and using corporate credit.

    • The legal concept of incorporation is recognized all over the world. In the United States, corporations are identified by the term "incorporated" added after the business name, such as "Texas Instruments, Incorporated", or by putting the word corporation in the name of the company, as in "Netscape Communications Corporation". In Germany, Austria and Switzerland the GmbH ("limited liability business association"), as well as the AG ("stock market traded business association") are the most common comparable concepts.

    In the United Kingdom the titles Ltd. (abbreviation for limited company) or plc (abbreviation for public limited company) are used for corporations. In France, Spain, Portugal, Poland and South America the title S.A. is used for corporations. Norway uses the title AS for stock corporations (Norwegian: Aksje Selskap). Italy uses "Srl", or "Società a Responsabilità Limitata" (limited liability company) and "SpA" or "Società Per Azioni" (stock corporation). The Netherlands uses NV. (Wikipedia)

    Sample Writings

    For many small businesses, the âSâ corporation is the business entity of choice. The âSâ in S corporation refers to a tax designation. All corporations are created the same way under state law. A small business must then chose a tax status, to wit, âCâ, âSâ or non-profit. Important issues concerning S corporations are covered in this article. C Corporation v. S CorporationFederal tax laws
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    This article provides useful, detailed information about Incorporate Church. A non-profit association is an incorporated association run with the primary purpose other than to make profit. The not-for-profit associations fall into three categories. Educational institutions and charitable associations for public benefit, trusts for the mutual benefit of the members and religious establishments like churches, religious beneficial programs and
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    -"Why should I incorporate? I can just do this business as a sole proprietor, right?" -"Isn't it complicated and expensive to form a corporation?" -"I run my business with my spouse, and we have a partnership. Why would we need to have a corporation?" These have to be the most frequently asked questions that I--and my own financial and legal advisors--get from our clients. The vast majority of
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