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Home » Aron Govil on The Advantages and Disadvantages of Incorporating Your Business

Aron Govil on The Advantages and Disadvantages of Incorporating Your Business

When you are starting a business, one of the decisions you have to make is whether to incorporate your business says Aron Govil. There are pros and cons to incorporating your business, and it is important to understand them before making a decision. Here are some of the advantages and disadvantages of incorporating your business:


1. Limited Liability

One of the biggest advantages of incorporating your business is limited liability. This means that the owners of the corporation are not personally liable for the debts and obligations of the company. This can be a huge advantage in case the company goes bankrupt or issued.

2. Tax Benefits

Another advantage of incorporation is tax benefits. Corporations are treated as separate legal entities for tax purposes. This means that the company’s income is not taxed to its owners. Sometimes, businesses can save thousands of dollars in taxes by incorporating.

3. Personal Asset Protection

A corporation provides another level of protection for personal assets. When you incorporate your business, it gives people with a valid claim against the company two choices: take the business (and thus its separate existence) to a court or go after the corporation’s assets. If they choose the latter, then their only recourse will be to attach something that belongs to “the company.” The owners are still free to keep everything else they own and operate outside of the corporation – unless they commingle their personal affairs with those of the company. A creditor cannot simply follow you home and try to grab property in your personal name; they would have to go through the process of taking the company to court explains Aron Govil.


1. Increased Paperwork

One disadvantage of incorporating your business is an increase in paperwork. There are more filings that need to be with the state, and there are also more regulations that must be follow. This can be a hassle for business owners who are already busy running their businesses.

2. Cost

There is also a cost associating with incorporation. There are filing fees and annual fees that must be paid in order to maintain corporate status. These fees can add up over time, so it is important to factor them into your decision-making process.

3. Regulations

In some cases, the regulations that apply t corporations can be onerous. For example, corporations may be requiring to have certain officers or directors, and they may be subject to specific record-keeping requirements. If you are not preparing to deal with these regulations, then incorporation may not be the best option for you.

Deciding whether to incorporate your business is a big decision. It is important to weigh the pros and cons and make a decision that is right for your business.

There are many reasons why a business might choose to incorporate, including limiting personal liability for business debts and maximizing tax benefits. But there are also some potential disadvantages to incorporation that should be consider before making the decision says Aron Govil.

  • The main advantage of incorporation is limited personal liability. This means that the owners of the corporation (called shareholders) are not personally liable for the debts of the company. This can be great protection for business owners in the event that the company goes bankrupt or has issues.
  • Another advantage of incorporation is the ability to raise money by selling shares of the company. This can be a great way to get funding for your business without having to take on debt.
  • One of the disadvantages of incorporation is that it can be expensive. The process involves setting up a business structure (either as a corporation, partnership, or sole proprietorship) with administrative requirements like annual meetings and record-keeping duties. There are also associating accounting fees, legal costs, and tax preparation bills to consider when incorporating your business.
  • Another disadvantage of incorporation is that there are some tax implications involve. Corporations pay income taxes on their profits on top of what shareholders pay in personal income tax on any dividends they receive each year. Also, corporations cannot claim capital gains exemptions for selling shares in other companies – so many strong start-ups might still prefer to remain unincorporated until they have established themselves within the. You should always speak with an experienced business lawyer for specific legal and tax advice.


Incorporation is a complicated process with many pros and cons to consider says Aron Govil. If you’re thinking about incorporating your business, speak with a lawyer for advice on the process and its consequences.

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