Do It Right, Not Over: 5 Key Pre-Incorporation Considerations

Corporations are the leading business vehicle in modern commerce. For start-ups, properly structuring and incorporating now is critical to avoid disputes, protect the corporation (and the founders) if they do come up and avoid the time and expense of doing it over later. Doing it right means thinking and planning ahead.

Here are five key considerations you should think about before you incorporate.

1. Timing

The three main ways to structure a business are sole proprietorship, partnership and incorporation. Of these, incorporation is the most complex and expensive to create and to operate. So most businesses kick off as a sole proprietorship: one owner/operator responsible for all aspects – and risks and liabilities – of the business. But as the business grows to include more than one "owner" (or begins that way), the time is right to look at incorporation and its benefits. A corporation is a legal entity separate from its owners (the shareholders). It alone is