There are many good reasons to form a corporation, if you intend to do so. People tend to believe that a Corporation and a Limited Liability Company are almost interchangeable, and in many ways they are not too far off the mark. However, there are differences between the two, and it is in these differences that people find their reason for choosing one or the other. There may be many people who lean one way or the other, so here are some reasons why you should choose to form a corporation.

1) Protecting personal property is an important issue for people starting a business partnership. If, in order to raise money for the purchase of goods or services in pursuit of business creation, an individual chooses to collect on an asset, that is her choice. However, risking losing it at some indeterminate future time is not a risk that many are willing to take. You can only lose in the proceedings of a business collapse what you yourself have put into the business. In the same way, it is possible to put personal property in the property of a company and protect it from being seized if you yourself are the subject of a lawsuit or a bankruptcy proceeding.

2) Taxes weigh less on a corporation than on an individual. If your income and many of your assets come from your business, you can protect yourself from higher levels of taxation. It is certainly something that requires close monitoring and is a difficult balancing act to pull off, but it certainly benefits a person to have this kind of flexibility in tax terms.

3) The permanence of a corporation is something that it has over a limited liability company. A corporation can continue indefinitely, and its identity is not defined solely by its membership. Although many people point to the greater flexibility of an LLC as the reason for choosing that way of operating, there are many who prefer a corporation for its greater consistency.

4) An incorporation will have its own eligibility for the credit, independent of, and not affected by, the personal credit qualifications of its owner or its shareholders and directors. By using corporate credit instead of personal loans, it is possible to build a business credit rating that allows for a much higher level of borrowing power and freedom from borrowing. This can allow a company to make much bolder decisions and grow at a faster rate.

5) Finally, there is a non-legal but equally compelling reason to form a corporation. The seal associated with being able to add Corp. or Inc. after your business name really makes your business be taken more seriously. It may be a purely cosmetic issue, but the very fact of it shows that many people will treat it as if it is the case, and for business purposes there is little difference between perception and reality.

Disclaimer: This article is for informational and entertainment purposes only and should not be construed as legal advice on any subject.