Setting up a corporation or Limited Liability Company (LLC) helps shield your personal assets and personal liability for the debts or actions of your company. While your newly formed corporation or LLC is treated as a separate legal entity you must treat it as such which includes avoiding the co mingling of funds, assets and credit files. One of the reasons to build business credit that gets overlooked the most is protection of the corporate veil. In this post, the main reasons for building business crdit will be discussed at lenght.
Too often, small business owners consider their ventures too small to worry about forming a business structure…that having an “Inc.” or “LLC” after the company name is only for large businesses with mazes of cubicles and a big payroll. The assumption here is that adding an “Inc.” or “LLC” after your company name means you need to trade in your small business feel for a power suit and cubicle. However, this couldn’t be farther from the truth. There's no reason that business culture and identity need to be linked with your business' legal formation. To put it another way, you can take your legal considerations seriously, while still having fun, and staying 'small'.
Did you know that business credit has 10 to 100 time’s greater credit capacity then personal credit? When you use personal credit to apply for business financing your mortgage, auto loan, credit cards and even student loans are affecting your ability to qualify. But when you take advantage of business credit reports you truly get to leverage the power of your business.
Transitioning your blog from hobby to business and switching from a hobbypreneur to an entrepreneur: When is it time to get serious and make your blog business official by incorporating or fomring an LLC?