• October 2018
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Should I Register My Startup If It’s Still in Beta?

Yeah you should incorporate!

Businesses incorporate primarily to limit personal liability. If you begin as a sole proprietorship and your business gets sued or you have a creditor’s lien, your personal assets can be at risk. On the other hand, if your business is incorporated then only the corporation can be held liable (as long as you fulfill certain requirements).

While a corporation may have a few more record keeping requirements and other formalities, this is a relatively minor drawback to endure for the liability protection that it offers.

A few additional benefits of incorporating are that a corporation offers unlimited life (the corporation will not dissolve upon the death of an owner), ownership shares can be easily transferred and added to, and incorporation is often a requirement when raising capital. In fact, if you ever reach such a point, many VC firms / angel investors prohibit funding unless the company is a corporation.

Before you incorporate, you should learn the differences between a C-Corp, an S-Corp, and an LLC. A brief answer on some of the differences here.

Have more questions? Feel free to visit LawTrades.

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