The Advantages of Incorporation
The key to business success is business growth. You're looking to make more money, to see higher profits, and to see your company expand. If you're at an important juncture in your company's development, you're probably wondering about how to organize your business to maximize profits and ensure the future viability of the company. At a certain point, you're probably wondering if incorporating your business – that is, forming a corporation – is the right move for you.
If you have any questions about the future of your business, contact the experts of Texas Legal Entities by calling 512-472-2431.
What is Inc.?
“Inc.” is the abbreviation indicating that a company is filed as a corporation, rather than a partnership or a company. Many of the world's largest companies are corporations, including Nike and Coca-Cola. The characteristics that define a corporation are:
- The corporation is owned by investors, who purchase shares of stock
- The corporation's day-to-day operations are overseen by a board of directors, elected by the shareholders
- The shareholders have only limited liability for the corporation; that is, if the corporation becomes insolvent, they are only responsible for their own investments, and not the corporation's debts
- The corporation has a distinct legal personality, meaning that it can sue or be sued in its own name
The advantages of the corporation are many. First of all, they can raise capital by issuing shares in the company. Larger corporations are able to spread debt throughout a multitude of investors, while smaller corporations held by a few important shareholders can retain autonomous control over the company and can make quick decisions. However, the more investors there are, the less individual responsibility each has.
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If you’d like to learn more about whether incorporation is the best option for your company, contact the Texas LLC experts of Texas Legal Entities by calling 512-472-2431 today.
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