JohnAnDeva

Corporation

Setting up a corporation may not be as easy as setting-up a sole proprietorship or a partnership.  It takes more time and is a bit more complicated.  However, it can be worth all your efforts since this structure limit the owner’s personal liability for business debts and court judgments against the business.

Corporations are independent legal and tax entity.  It is separate from the people who own, control and manage the busienss.  Taxes are paid through the personal tax returns of the owners.  The corporation itself pays for the taxes.   The owners only pay personal income tax on the money they draw from the corporation in the form of salaries, bonuses, dividends, and the like.

Setting up a corporation instead of a sole proprietorship or partnership is best if you rund the risk of being sued by customers or of piling up a lot of business debts or when you have substantial personal assets that you want to protect from business creditors.