You may have heard commercials that promise that they can incorporate your business with only 15 minutes of work.  But they don’t promise it’s free!  In reality, incorporation can cost several hundred dollars after legal and government filing fees. That’s true even if you’re using a simple service like LegalZoom or IncFile. But with all of that extra money and paperwork, is incorporation really worth it?  Here are three of the bigger benefits of incorporating your business, so you can decide if it’s right for you.

Protect Your Personal Belongings from Lawsuits

Asset protection is the single biggest advantage to incorporation.  If you’re operating as a Sole Proprietor (you haven’t incorporated yet) then you are personally liable for what your company does.   If you, or someone working for you, makes a big mistake and a customer sues you, and your business doesn’t have the money to cover the costs, that customer can go after your home, car, or personal savings.  If the business is incorporated, they cannot go after your personal belongings in a lawsuit.

Protect Your Name from Being Copied

In many states, incorporation protects other companies from using your name.  If your business becomes successful without being incorporated, someone else can incorporate their business using the same name you’re using.  Incorporation protects your business name from being copied.

Enhanced Credibility

Some customers believe that small businesses are more established or reputable if they have an LLC or Inc after their name.  It does indicate that the owner has invested the time and money required to create a formal business. That is something they may not do if it was only a side job or seasonal job.  For customers worried about whether a painter can deliver the services they promised, it might be a decision-making factor between two similar paint job quotes.

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