Starting a business involves a lot of decisions, one of which is when to incorporate and form a legal entity. Do you wait until you start making real money? When should a small business incorporate?
“Right away,” encourages small business attorney, Garrett Sutton. He’s seen firsthand the problems that can arise when small business owners don’t take that crucial step.
Nav founder and Chief Legal Officer, Caton Hanson, agrees. He’s started several businesses, and says once a business gets past the idea stage is when he sets up a legal entity, typically an LLC.
“I always incorporate my businesses first thing. I’ve done it as soon as I have decided to do any kind of business,” he said.
Here are three reasons to incorporate your business sooner rather than later.
Related: Incorporate Your Business Through StartupNation
You’ll help protect your personal finances
Sutton’s primary reason for recommending incorporation is that it can remove personal liability from the equation.