I’m A Solopreneur, Do I Need To Incorporate? What Are The Benefits?
When potential clients reach out to us and they explain that they are going to be the sole founder of a company, sole owner of a company, they often ask us do I even need to form a company? And what are the benefits of forming a company versus sort of just operating the business on my own? There are a few benefits and important ones.
One, it’s important to start by building a strong foundation. So identifying a legal entity through which you want to operate a business is never a bad idea. Signing contracts under that entity, creating intellectual property under that entity, of course employing people under that entity. It’s nice to have a good foundation and a legal liability shield under which to operate even if you’re the only owner for a period of time.
You don’t know if you’re going ever grow and add partners. You may or you may continue to operate the business on your as a solopreneur until you decide to no longer operate the business on your own. But having that legal liability shield and having an entity that could own assets and intellectual property and other things versus you owning it is a benefit. Another benefit of forming an entity, even if you are going to be the only owner, is you separate your personal life from your business life. So you have a separate tax ID number.
You’re not using your social security number as the tax id number for a company. You would have separate bank accounts, separate credit card accounts, a separate set of books and records. So it is nice to keep things separate and apart from your personal life, even if you’re operating the business on your own.
Another benefit of having a company, even if you’re a solopreneur and the sole owner of the company is name recognition. If you’re operating a business on your own, under your own name, that may not sort of achieve the objective you’re looking for when you go out to the market and want to have a brand name attached to the business you’re operating. Yes, you can in New York, what’s called file an assumed name even if you’re an individual, but it is better to do that under a business entity.
Contact us and we will help you with incorporating your business.