5 Benefits of Incorporating Your Maryland Small Business
Starting a small business is an exciting and rewarding adventure, but it’s important to make wise decisions when it comes to structuring your business. One of the most popular options for small business owners is incorporation. Incorporating your small business in Maryland comes with many benefits that can help your business grow and thrive. Here are five of the top benefits of incorporating your Maryland small business.
1. Limited Liability Protection
One of the most significant benefits of incorporating your business is limited liability protection. When you incorporate your business, your personal assets are separate from your business assets. This means that if your business is sued, your personal assets are protected. You won’t be personally liable for any debts or claims against the business. This benefit alone makes it worthwhile to consider incorporating your small business in Maryland.
2. Tax Advantages
Incorporating your small business in Maryland can also provide you with tax advantages. Corporations are taxed differently than sole proprietorships or partnerships. As an incorporated business, you may be able to take advantage of tax deductions and credits that are not available to other business structures. Additionally, corporations have lower tax rates on the first $75,000 of income compared to other business structures.
3. Increased Credibility
Incorporating your small business in Maryland can also increase your business’s credibility. Having “Inc.” or “Corp.” in your business name can make your business look more established and professional to potential customers, investors, and partners. Customers may be more likely to trust your business if they see that you have taken the time to incorporate.
4. Easier Access to Capital
Incorporating your small business can also make it easier to access capital. Corporations can issue stock, which can be sold to investors to raise capital. Incorporating can also make it easier to obtain loans as a corporation is considered a separate legal entity, meaning it can have its own credit rating and borrowing power.
5. Perpetual Existence
Incorporating your small business in Maryland also provides the benefit of perpetual existence. This means that your business can continue to exist even if you sell your ownership interest or if a shareholder or director dies. As a separate legal entity, your business will continue to exist unless it is dissolved.
In conclusion, incorporating your small business in Maryland comes with many benefits that can help your business succeed. Limited liability protection, tax advantages, increased credibility, easier access to capital, and perpetual existence are just a few of the benefits of incorporating your small business. Consider talking to a lawyer or accountant to help you determine if incorporation is the right choice for your Maryland small business.
