Contact Us for a Free Consultation 570-468-7603


When Is a Good Time to Incorporate?

Posted by Scott Lynett, Esq. | Oct 20, 2022 | 0 Comments

If you are still operating as a sole proprietor, the time to incorporate your business is now. 

Incorporating your business can save you money on taxes and limit your liability for business debts. But, most importantly, it says to the world – I'm in business. And that sends an important message to you, your clients, your spouse, your friends, family and, yes, even to the IRS.

In the early months or years of your business, you may not be earning enough money to save on your taxes by incorporating, but it's still important that you do, if you want to be making that kind of money.

You see, it's the act of incorporating itself that says “I'm in business” and gets you on the path to earning, learning and growing.

Here are some other benefits of incorporation

Incorporation puts a protective wall between you and the activities of your business. Creditors, clients, and other potentially litigious entities can go after your incorporated business, but not your assets, so long as you maintain the corporate formalities of your business.

Incorporating your business will allow you to take out debt in your business's name, and if you want to raise money from investors, you'll need to incorporate to give your investors something to invest in.

And, even if you are not raising capital, incorporating can make it less likely that you'll be audited on your taxes, 7-9 times less likely, in fact.

If you have not incorporated yet, the best time to change your business entity's structure is January.

Starting the year off incorporated (rather than changing mid-year) can help reduce the paperwork burden of filing taxes as two different entities.

Consider a delayed filing, which will allow you to complete the paperwork well before the new year starts—thus avoiding the end of year pressure—but stay on the fast-track to incorporate come January.

Incorporation takes some legwork, but with sound advice and professional planning, you can reap the benefits without the headache. If you want to minimize your liability and position your business for success, begin by sitting down with us. We can establish a sound legal, insurance, financial, and tax system for your business so you can focus on the growth and success of your business.

We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. Call us today to schedule. Or, schedule online.

About the Author


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Contact Us Today

Legacy Planning is committed to answering your questions about Estate Planning issues in Scranton and Eastern Pennsylvania. We offer consultations and we'll gladly discuss your case with you at your convenience. Contact us today to schedule an appointment.

By Phone Virtual