According to a report from the Kauffman Foundation, many college students are increasingly interested in entrepreneurial pursuits. In fact, a number of universities are boosting their business training programs to accommodate this growing interest.
Now, a report from ChiroEco.com offers recent or soon-to-be graduates some tips on business formation. There are many things to understand about the process of business incorporation that students with less work experience might miss. To start, the source says students considering business formation upon graduation should do their homework on protecting personal assets.
The source says protection of personal assets might be the most important benefit of incorporation, particularly in an age when many clients are quick to sue. A limited liability company will provide entrepreneurs a separate business identity and personal identity.
There is also the matter of pass-through taxation. S corporations and LLCs help businesses avoid the double taxation – first on the corporate then personal level – to help entrepreneurs get every penny they deserve.
Another benefit of incorporation that should not be underestimated is credibility. Adding “Inc.” or “LLC” to a business makes the entity seem more established which might be particularly helpful for recent college grads looking for clients.
Additionally, the credibility could help entrepreneurs secure startup funds in trying times. Entrepreneurs – of all ages and experience levels – might take note of this recommendation as Senator Dodd’s recently proposed legislation might reduce the number of angel investors in America.