Company incorporation refers to the process of constituting a company as a legal entity that complies with all the mandatory rules as per the Companies Act 2013. Incorporating a company is not just ensuring legal compliances, it also offers many advantages. It is the first step towards furthering its future growth and development. Founders and owners are distinct and they can hire various experts in their fields to run the business operations of the company efficiently leading to better accountability. Offering good facilities and attractive salary packages can help in hiring and retain the best talent in the market.

It may not even be necessary for all businesses to incorporate themselves. It may seem quite a daunting task initially however with the availability of multiple resources and professional experts, the process is made easy. Besides, it also helps you to streamline your business operations and conduct all the activities under legal boundaries. All the information regarding the company information is available on the Ministry of Corporate Affairs and you can file your company’s registration online on the MCA website yourself. It is an absolute myth that company incorporation involves insurmountable paperwork. In today’s digital age, most of the processes are streamlined and can be completed online with guidance from the right experts correctly.

It provides tax advantages to the companies such as deduction of health insurance premiums paid to employees on behalf of organizations, savings on employee compensation, medicare taxes, and life insurance.

Protects your assets

Staring your own business is like a dream come true however it comes with great risk. Sometimes businesses fail due to changing market demands or unforeseen downturns in economy. Covid-19 is one of the biggest examples of many businesses being shut during the pandemic. The company incorporation is of huge benefit during such unfortunate circumstances. By incorporating your company as a corporation or LLC, you are eligible to safeguard your assets from creditors. For example, creditors cannot use your property such as your house, car, investment accounts, etc. to pay off your debts in case your fail to clear your business loans. In case, you haven’t incorporated your business yet, your assets automatically get linked to your business.

If you file for bankruptcy within your business, then your assets can be utilized to clear off your debts but if you file for personal bankruptcy, your business will be regarded as an asset that will be liquidated to repay your debts. By company incorporation, you can protect your business from any type of such situation in the future perhaps making it one of the best advantages of incorporation.

Also, as per the Companies Act- Section 34(2) if a company shuts down, the members have the liability to contribute for its assets and liabilities. However, in case the company has been incorporated, none of the members have any legal liability to contribute more than the nominal value of shares owned by the members still being unpaid.

Have easier access to capital

Capital is the primary requirement for running your business successfully. Incorporating your business under the legal guidelines set by the government provides a legitimate status to your business wherein you can open a company bank account and apply for loans. A registered company is considered more reliable and can easily attract investors and receive capital. Besides loans, a company can also raise funds through equity i.e. raising funds through the public in the form of shares. SEBI and other related laws are setup to source funds in the form of equity from the public. However, to achieve the same, the company must fulfill the legal criteria of being a public company and be listed on a recognized stock exchange.

Enhances your business’ credibility

Incorporating your company undoubtedly enhances its credibility in the eyes of customers. You may have started your business on a small scale with few customers which must have helped you in further growing it. But new customers must have not witnessed your growth phase and they prefer to purchase from only professional organizations. Besides, they also try to research, gather information, and read reviews about the organization. Hence, an incorporated company with a website containing all the details enhances the company’s trust and brand image in the mind of customers.

Additionally, a company’s incorporation is also about your company’s business operations, brand logo, tagline, location, and the kind of services and products offered by them. Hence, it is not just the name that is being protected through the company’s incorporation. It is also about protecting the overall brand image.

Perpetual existence

Incorporating your business legally can protectyour business forever irrespective of the fact who was involved in the initial stages of setting up the business. Still, your business can either be sold or closed anytime under unfortunate circumstances. However, incorporating your business means its ability to remain in perpetual existence as its entity hence even if anything happens to the people involved in the business it continues to remain profitable and operational. Moreover, it has many advantages for your business such as:

• It gives confidence to investors that doing business with your company is legally safe.
• Empowers businesses to develop a long-term growth plan
• Maintains the operational capacity of businesses without any need to re-establish itself at various times.

Gain anonymity

One of the most important benefits of incorporating the company for some people is to gain anonymity status both for personal identity as well as business affairs. Except for the mandatory public details, you can also keep your business affairs private until you decide to disclose them. This kind of privacy is an important necessity for many businesses so that they can protect the trade secrets. Many states don’t obligate to mention your name on any business documents hence helping you in maintaining complete privacy.