For startup business owners, deciding when to incorporate and which business entity to form is an important step for growing a company. Two well-known forms of business are corporations and limited liability companies. The eCommerce Times offers some insight into the original purposes of these entities and how they remain viable ways to protect businesses.The late Chief Justice Marshall defined a corporation as “an artificial being, invisible, intangible, and existing only in contemplation of the law.” Corporations were created with the intention of separating a business owner from the debts of their company, and this business type has been popular since its creation.
Limited liabilities, on the other hand, have only become popular within the past 15 years. The source calls this a “flexible business entity” somewhere between a corporation and a sole proprietorship. As the name suggests, this business type limits the personal liability of founders and shareholders.
The source advises small business owners to do their homework on how these entities have developed, and the advantages they offer in the current economic climate before incorporating.
Entrepreneurs can seek the guidance of professionals at an incorporation service to learn more about the protection offered to business owners through these different business types. Additionally, choosing inexpensive, online incorporation might offer the immediate benefit of cash savings on necessary filings.