Incorporation is probably the most popular legal form of enterprise. Why? Because of the many benefits, it offers by allowing businesses to meet legal contingencies, pay less tax and increase their wealth.
Let’s take a closer look at http://acshk.com/offshore-tax-exemption/ these benefits so that you can determine which one is important to your business.
The longevity of the company
When you incorporate your business, you create a separate legal entity, which is not true for other types of businesses. In the case of a sole proprietorship, for example, if you die, your business disappears with you.
As a separate legal entity, a stock company has the potential to last in time. You can set up a succession plan and bequeath the business to your heirs, or simply sell it. It means that it can survive you, last for decades, centuries, or even beyond.
Take for example some of the largest companies in the world. Each of them is a separate legal entity from its founder so that it can continue to grow after its death.
Since you create a separate legal entity for http://acshk.com/our-incorporation-packages/ when you incorporate your business, you benefit from what is known as limited liability. This means that as a director or shareholder of the company, you can not, in most cases, be held personally liable for the debts or obligations of the company. If the company is sued or goes bankrupt, the assets of that company will be at stake, but not your personal wealth, such as your savings, your home or your vehicle. You may lose your investment in the company, but you will not be liable for any other amount owed by the company.
It should be remembered, however, that limited liability does not mean unlimited liability since there are situations in which the director of a company may be held liable. For more information on the benefits and limitations of limited liability, read our article Limited Liability Demystified: Benefits and Limitations of Incorporation.