We are a Church and are Incorporated status, what is the difference between being Incorporated and not being Incorporated.?
Incorporation provides many legal and other advantages.
One of the primary advantages of incorporation is the limited liability the corporate entity affords its shareholders/members. Typically, shareholders and directors are not liable for the debts and obligations of the corporation; thus, creditors will not come knocking at the door of a shareholder or director to pay debts of the corporation. In a partnership or sole proprietorship the owner's personal assets may be used to pay debts of the business. Maintaining the limited liability of a corporation requires that the shareholders and directors follow all the rules of governance, including holding annual meetings and maintaining meeting minutes.
A corporation's life is not dependent upon its members. A corporation possesses the feature of unlimited life. If an owner dies or wishes to sell his or her interest, the corporation will continue to exist and do business.
Retirement funds and qualified retirement plans (like 401k) may be set up more easily with a corporation.
Ownership of a corporation is easily transferable.
Capital can be raised more easily through the sale of stock.
A corporation possesses centralized management.
Tax exempt status can be granted by the IRS and under state law.
Atty. Shawn Rice of Wisconsin SRICE@RGLAWonline.com
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