Setting Up Your Corporation the Wrong Way

The goal for many small business owners is to eventually be liberated from their business. By properly creating a systems-dependent business that doesn’t rely on specific people to run it, including the owner, you’ve created the ultimate reward: freedom from your business to enjoy more life.

Many business owners are unaware of the important role that incorporation plays in securing their financial security and, ultimately, freeing themselves from their business. Even fewer understand the essential steps necessary for building the kind of corporate credit that will enable them to take full advantage of their entrepreneurial status.

Incorporation makes your business entity separate from you, the business owner. It makes it a separate entity with its own liability. Incorporation separates your business assets from your personal assets. If someone decides to sue your company, they cannot touch your house, car, or anything else owned by you or your family.

But eliminating your personal liability for your company’s debts and actions isn’t the only reason to incorporate your business. You are in business to make money, and to make a profit and sustain your business, you need capital—in the right place, at the right time. By incorporating your business, you enable your business to begin establishing corporate credit, which will ultimately provide the funds you need to grow your business.

Be aware that incorporating your business doesn’t automatically qualify you for all the corporate credit you need, much less the best type of corporate credit. Your goal should be to secure cash lines of credit—not lines of credit that are tied to particular stores or vendors—for which you do not need to offer a personal guarantee.

Some of the preliminary steps every entrepreneur needs to take to secure excellent corporate credit include incorporating your business, maintaining a physical office, obtaining a local phone number and a 411 listing and getting a business license.

The System for Building Business Credit

To secure this type of corporate credit, you need to follow a well-defined, step-by-step system to build your corporate credit history and business credit score. And it will help tremendously to have an ally and an expert to assist you in the process of safely establishing business credit.

If you need help incorporating or building good business credit, click here for a complimentary business credit consultation and to obtain our free e-Book, "Unlimited Business Financing—Without a Personal Guarantee”—a step-by-step process for building a business credit asset.