The trucking industry is very competitive, but it is growing substantially over the years and trucking services are in high demand. Starting a trucking business comes with a decision whether to incorporate it or not. Although corporation filing is costly and time-consuming, its benefits outweigh all the disadvantages. One of the most important reasons for a Corporation Filing for trucking businesses is to protect the owner’s assets and establish credibility.
There are different legal structures to consider when incorporating your business. Therefore, you need to do thorough research and choose the structure that best fits your company. Incorporating your business in your base state help to reduce confusion and saves more money. Continue reading as Global Multi Services explain why Corporation Filing is necessary for trucking business.
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Access to Capital
Corporations sell ownership and raise capital by trading their stock publicly. This helps them have more access to capital. Also, one of the criteria for borrowing money in many banks is by being an incorporated business. This access to capital helps many businesses grow and saves them from going bankrupt in times of need.
Limited Liability
Corporations provide personal liability protection to their shareholders. That means the owners are not personally responsible for the debts and liabilities of the business. This is one of the main reasons companies choose to incorporate. For example, when a corporation is sued, the shareholders are not personally responsible for corporate debts. Thus, creditors cannot pursue their assets. However, in a sole proprietorship corporation, the owner’s assets and business assets are considered the same. Therefore, can be used to pay business debts.
Business Management
Incorporated businesses have distinct business management. The shareholders are responsible for making decisions. They speak with the board of directors, who delegates their authority to the company's officers. These improve accountability, efficiency, and business growth. Corporations also have resources that make them offer good salary packages which attract the best talent available in the industry. The lack of structure and shared decisions in an unincorporated business can affect the company.
Tax Advantages
Corporations enjoy tax flexibility such as medical taxes, savings on self-employment taxes, worker’s compensation, and many more. Although some corporations, like C corporations, are charged with double taxation, others, like S corporations, are not.
Business Security and Longevity
Corporation
ownership depends on the percentage of the company shares held by the
shareholder. This makes the transfer of corporation ownership flexible, and the
business also perpetuates for a long time. Although the transfer of ownership
depends on the governing agreement in the bylaws and articles of incorporation,
ownership of the corporation is often easy to buy and sell. For example,
if a shareholder dies, their stock can be transfer to someone else. Similarly,
they can sell off their stocks if they want to leave the company.
Business Credibility
Incorporating your business establishes credibility. It builds banks, customers, and investors' trust. It also makes them believe the company has a positive image.
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