Corporate Formation in San Diego: Why Should I Consider Incorporating?

corporate formation in san diegoWhen running a business in San Diego and throughout California, there may come a time when you consider incorporating. Whether your business is a sole proprietorship, a limited liability company (LLC), or a partnership, incorporating can have some significant benefits.

Incorporating is a big step that can involve a lot of paperwork and that will cost your company money. Before you take the leap into incorporating your business, it is important to speak with an experienced San Diego corporate formation attorney. At Sepahi Law Group, P.C., our corporate formation attorneys in San Diego can evaluate your situation, explain the benefits and disadvantages of incorporating and empower you to make the best choices for your business. If you decide to incorporate, we can also take care of the process for you.   Call today to learn more about corporate formation in San Diego.

Why Consider Incorporating

When you incorporate, your business becomes a separate legal entity with its own distinct identity. This changes many different things and provides many advantages. Some of the many reasons why you may wish to consider incorporating your business include:

  • Protection from liability. If the company is sued, your personal assets are on the line in a partnership or in a sole proprietorship because there is no actual legal separation between you and the business.  When you incorporate, if the business is sued, your personal assets are generally safe.
  • Protection from debts. Just like with liability, if you and your business are the same legal person then you can be responsible for business debts. If your company incorporates and then goes bankrupt, you won’t have your personal assets affected. You are not responsible for the debts of the business except under rare circumstances such as if you signed a personal guarantee.
  • Tax benefits. When you incorporate, there may be significant tax advantages. While C-corps may be subject to double taxation, there are tax deductions available to corporations that people often cannot take. S-corporations can provide an especially advantageous tax structure, as the profits and losses pass through to the business owners. In some cases, owners are able to pay themselves a reasonable salary and take the remainder of funds from business profit in distributions, thus saving on Social Security and Medicare taxes. Salaries must be set as reasonable or the IRS may take issue with the distributions and declare they should be salary income.
  • Easier succession. Corporations can live forever. This means if your business is incorporated, it can be easier for you to transfer it to heirs upon your death so the company can continue to operate.

These are just a few of many examples of benefits associated with incorporating. Call today to speak with an  attorney at Sepahi Law Group APC to learn more about corporate formation in San Diego and whether incorporation is the right choice for your business.

Scroll to Top