When one incorporate, this means that the business is legally a separate entity from its owners, shielding them from any personal liability for business debts and obligations.

The limited liability for those involved in corporations is often considered the primary benefit of this legal structure. But this is not to say that protection is guaranteed in all cases; there are exceptions. For wrongs you personally commit, you could still be held liable.

Another aspect about incorporating is that the life of a incorporate is not dependent on the lives of its members. So the corporation will continue to operate even if the owner or owners die or if they decide to sell their interests.

Ways to incorporate

There are only a couple of options when it comes to the ways you can approach incorporation.

Lawyers

Traditionally, companies turn to their lawyers to handle the incorporation process. Although it's ideal to have a lawyer walk you through the procedure for incorporating, this could be a time-consuming job, which will run up your legal bill.

To minimize this cost while ensuring that you have proper legal advice, consider using a lawyer for the major points of incorporating only. The rest you could handle either on your own or through an online incorporating service.

There are growing number of online sources that will take you step by step through the incorporating process and take care of preparing filing the necessary paperwork. It's as simple as filling in an order form. Just be sure that you've done the research beforehand.

And even though you don't have to rely on an attorney every step of the way, at minimum consult with one on the major points of incorporating just to make sure you're on the right track.

The basic elements of a Incorporation .

1. DESCRIPTION.

3. ADVANTAGES.

5. MANAGEMENT.

More common types of corporations.

1. General corporations. These are the most common legal structure. This is a legal entity that is owned by an unlimited number of stockholders who are personally shielded from debts or obligations related to the business.

2. Close corporations. Close corporations have a small number of shareholders, ranging from 30 to 50, no ready market for the corporation's stock, and active participation by the majority of shareholders in the management of the corporation.

3. S corporations. This type of corporation provides the benefits of incorporation, but it eliminates "double taxation," which is when the profits of a corporation are taxed first as income to the corporation and then second as income to the shareholders when profits are distributed as dividends. An S corporation is limited to 75 or fewer shareholders.

4. Limited liability company (LLC). An LLC is a business entity formed upon filing articles of organization with the proper state authorities. LLCs generally provide limited liability to their members, and are taxed like a partnership, preventing double taxation.

Incorporate a Company benefits to a business owner: -

1. Ease of Operations: Depending on the jurisdiction and the type of business activity to be conducted under the company name to be incorporated, the operating restrictions, auditing and accounting requirements and standards to which the business and its employees and directors must adhere are often far less restrictive offshore than onshore. Exceptions to this rule are financial services based companies in many jurisdictions for example, who have to comply with extra regulatory legislation for the protection of the companys clientele. The advantage of easing operations particularly for a small or start up company is a reduction in operating costs and in the amount of time a companys directors have to dedicate to form filling and report filing.

2. Reporting Simplification: This ties in with the first benefit; in the majority of offshore jurisdictions favoured for company incorporation the company activity reporting requirements are often far fewer and simpler as the business activities entered into by the company are conducted outside of the jurisdiction in which it is incorporated. Furthermore personal information relating to the companys directors and shareholders need not be declared in all cases or the extent to which personal information is required is far less intrusive.

3. Taxation Reduction/Negation : The reduction in taxation liability is one of the main benefits associated with investing offshore, opening an offshore bank account or incorporating a company offshore. If you set up your company in a low or no tax jurisdiction you could potentially save yourself substantial amounts of money legally. Often the rules are that if the company incorporated in a particular jurisdiction never derives an income from the local economy it can operate tax free. Its therefore possible to use an offshore company in an overall international business structure and ensure profits are posted in the offshore jurisdiction and so no tax is liable! Many international corporations operate in this way and actually negate their tax liability fully.

4. Asset Protection: - By operating a company offshore, i.e., outside the jurisdiction in which the company operates, it is sometimes possible to position assets away from the reach of any potential litigious action and also to shield business transactions from the eyes of the competition.

5. Personal Privacy Protection: The level to which a director or shareholders personal information is required, held, visible or investigated offshore is likely to be far less invasive and intrusive than onshore. It is also possible to appoint nominee directors and secretaries for offshore companies in many jurisdictions thus keeping the true company owners identity shielded. The information contained in this article cannot constitute advice. Each individuals circumstances are unique and whether or not offshore company incorporation is something that could benefit your business can only be determined with personal advice