One advantage of structuring a corporation correctly is the increased tax benefits associated with being incorporated. By law, corporations are entitled to many tax deductions that are not available to individuals, sole proprietorships or partnerships. Those tax benefits could save you thousands of dollars annually. A properly structured corporation can protect your personal assets, reduce your taxes and provide a universe of pre-taxed “fringe benefits” such as retirement plans, deferred compensation, annuities, life insurance and medical reimbursement plans.

California has no requirement that the names of shareholders (owners) be filed with the State. California requires only 1 person to be a Shareholder (owner), Director, President, Secretary, and Treasurer. Corporations can provide privacy, anonymity and secrecy not available to sole proprietorships or partnerships.

Over time, it may be possible that your corporation could carry its own credit rating, making it possible for your corporation to raise capital and secure credit with financial institutions, and better rates with your business partners. To enhance your chances of obtaining a higher business credit rating, separate your personal credit from your business credit. This means that you want your business to be structured as a corporation or an LLC, NOT as a sole proprietorship or partnership where you and your business are one in the same. It is best to separate business and personal credit as soon as possible. It’s also important to do most of your business with companies that will report to the major credit reporting agencies. (Source: Dunn & Bradstreet, Business Credit Reporting Agency)