Starting a small business can be an exciting and rewarding experience. There are many benefits to incorporating your business, from protecting your personal assets to taking advantage of tax deductions. A certified public accountant (CPA) can help you make sure you are taking the right steps to not only launch your business but also keep it running smoothly year after year.
What Does It Mean To Incorporate a Business?
Incorporating a business means that it has been legally established as its own entity separate from its owners. This allows the business owners to limit their liability if the company is sued or experiences financial losses. Incorporating also makes it easier for businesses to acquire loans and investors. There are several different types of entities that a small business can choose when incorporating including sole proprietorship, partnership, limited liability company (LLC), and corporation.
The most common type of entity chosen by small businesses is the LLC. An LLC offers more protection than a sole proprietorship or partnership and provides many of the same benefits as a corporation. LLCs also have simpler tax filing requirements than corporations in most cases.
What Are The Benefits Of Incorporating?
Incorporating your small business has a number of benefits that can help you manage the growth and success of your company. These benefits include:
- Protection from personal liability: By incorporating, you are creating a separate legal entity from yourself meaning that personal assets such as real estate, vehicles, and bank accounts will be protected in the event of a lawsuit.
- Tax deductions: As an incorporated business owner, you may be able to take advantage of certain tax deductions that are not available to sole proprietorships or partnerships.
- Simplified accounting: When you incorporate, your accounting process becomes much simpler as all income and expenses must now be reported under one entity instead of multiple individual ones.
- Easier access to financing: Banks and other lenders may be more willing to provide financing for an incorporated business as they view it as being less risky than lending to an individual.
How Can A CPA Help?
A certified public accountant (CPA) can provide valuable assistance when it comes to incorporating a small business. They can help with everything from filing paperwork with state agencies to setting up accounting systems. A CPA will have knowledge about the different types of entities available and which one would best serve your needs and goals.
Your CPA will also be able to advise you on important topics such as filing taxes, writing off expenses, setting up retirement accounts, and more. They can provide valuable guidance throughout the life cycle of your business so that you don’t run into any unexpected issues down the line.
Conclusion
Incorporating your small business has numerous benefits that can help ensure its long-term success. Hiring a certified public accountant who specializes in this area is an excellent way to ensure that all of the necessary steps are taken to properly incorporate your business and protect both your personal assets and those of the company.
Percepta Tax Solutions, for example, offers comprehensive CPA services for businesses at all stages of growth – from startups all the way through established corporations.