Mary Aljian – Why incorporate a business

Mary Aljian

If you are a business owner, you probably have questions about incorporating small business. Most often business owners ask why incorporate. Many people run their small businesses as sole proprietorships for many years without considering the benefits incurred from taking the steps to incorporate business. However, as tax time comes round, you might be dismayed to see how much of your business income goes to pay taxes for a sole proprietorship. This is when many small business owners begin to consider if incorporation is right for their business.

One big reason why businesses decide to incorporate is that in the United States business law favors corporate interests, giving them rights, privileges and protections that are often no longer available to individuals. This goes back to an early Supreme Court case that had an amendment added to it by a law clerk. The case was Santa Clara Co. vs. Southern Pacific Railroad, and the law clerk essentially wrote his own words into the judge’s opinion. The wording he added caused corporations to be considered as natural human beings, and gave them the same rights as humans under the 14th Amendment of the Constitution. This classification has been the entry point for some large businesses to influenced lawmakers to favor legislation that helped them to grow in power and size. (more…)

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