Now more than ever the American people will be turning to local businesses to meet their families’ nutritional needs. With the economic impact of COVID-19 the number of applicants for government assistance has doubled. As part of the U.S. government’s $2T stimulus package, an additional $15.5B has been allocated to the SNAP/EBT government benefits program.
Why It Might Be Smart For You to Incorporate Your Business
TravelCenters (TA) of America has begun to incorporate their rest locations and restaurants in 43 states on May 23rd. After a meeting between board members, the company elected to go public and liquidate what it had in assets into stocks to be openly traded on the market. Now, you may be wondering what this has to do with your store? This situation can have a very positive effect on how you run your business depending on what you do with the information.
Benefits of Incorporating:
Incorporating your business creates limitless capital opportunities:
- In corporations your business is funded by investors who willing to reinvest for the betterment of the company and you.
Incorporating means shared liability between everyone in the company:
- In the rare circumstance that you become the victim of a lawsuit or a credit card scam, the business as a whole is indicted not just you. If this is to happen, that means that you have an entire company there to protect you legally.
You also share limited liability in debts:
- rather than default on a payment, alone, you have an entire network of investors willing to reach out and help you. In many cases, creditors are unable to pursue shareholders for debts, which for many new businesses, could be the help they need.
(Potential) Consequences of Incorporating:
There are many benefits to incorporating, but here are some quick tips that you may not know.
In a corporation, the business is run by a board of directors:
- The Board ultimately make the big* decisions like stock-market choices or who is in charge. This can put you at risk of not running your store, but as long as you own stock you have a say in the company's decisions and who is on the board.
Some corporations face limited revenue coming in:
- In a sole-proprietorship the money goes straight to the owners pockets after tax and business deductions. In Corporations, that money is given to stockholders. This is called dividends which is generally paid every quarter, but the common practice of shareholders is to reinvest so don't think you'll be without that money for too long before you get it back.
Corporations face more regulation and oversight:
- This "consequence" really doesn't mean much especially in today's current economic climate. There is less and less regulation but more pressure on you to make sure the proper steps are taken.
In conclusion, there are many perks and some downsides to incorporating and some other important information not covered in this list. If you'd like to learn more click here. If you have any other questions feel free to comment below or read some of our other blogs to get up-to-date on all the information needed to have a successful business.