If you are a newer business owner or running a sole proprietorship, you may be wondering what benefits are available to you when it comes to incorporating your business. The transition of liability is one of the biggest benefits to making your business a corporation.
A big reason for incorporating your business is for the protection of your personal liability. If you are running the business yourself, as in a sole proprietor, you are directly responsible for the business. This includes business liabilities, especially if there’s any problems that occur. For example, if the business gets sued, you’re on the hook personally which would mean your personal self and personal assets could be subject to the lawsuit.
When incorporated, the corporation is a separate legal person. This means that the corporation takes on those liabilities or problems that occur with the business. Generally speaking, you do not need to worry about being personally liable for the corporation’s issues. Your liabilities are limited to only what you’ve personally invested in the company.
If you require help with the next steps of incorporation or if you are looking for assistance when it comes to business liability, our Business Law team at CBM Lawyers can support you through the necessary steps.