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Why You Should Incorporate
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LIMITED LIABILITIES
A small corporation allows the
business owners limited liability status. This means the
owners are not normally liable for business debts.
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S-CORPORATION TAX
STATUS
In some situations an unincorporated
business will benefit after becoming a corporation in a
number of ways (e.g., perpetual existence, limited
liability, etc.) but will benefit from being taxed as if it
was a partnership. Both corporate status and partnerships
tax status can be obtained simultaneously if S-Corporation
tax status is elected.Sub Chapter "S" election occurs
within 75 days after incorporation. Profit distribution is
not subject to FICA, FUTA, or SSI taxes.
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EMPLOYEE BENEFITS
A corporation allows business owners
to be treated as employees, a status that can offer many
advantages. Pension plans, profit sharing plans, medical
and disability insurance all become available to employees.
Health insurance can be 100% tax deductible.
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FINANCIAL ADVANTAGES
The corporation has increased
financial flexibility in terms of splitting income,
obtaining capital, etc.
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