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Posted on 7/1/2009 8:21:21 AM Robert Link |
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Why should I Incorporate?
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| I'm putting together an online business and am questioning the need to incorporate and in what state. |
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| The main reason for individuals to incorporate their business is to protect their personal assets (home, car and other prsonal property). If the business fails, or sued, your personal assets generally cannot be attached to satisfy the corporation debts. In a sole proprietorship or partnership, the individual or partners are personally liable for all business debts. Other reason to incorporate is the tax advantage. Corporations and LLCs can take advantage of tax savings options that are not available to sole proprietorships or partnerships. For example, corporations can establish pension, profit-sharing and stock ownership plans, which can lower the corporation's taxable income. Medical, life and disability insurance premiums are also completely tax deductible for corporations. In addition, a corporation can own shares of stock in another corporation and receive 80 percent of the dividends tax-free.
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