When Should You Incorporate Your Business?

When should you incorporate? Every type of business is different, but most typically, businesses incorporate about six months before their first sale. That is because many government agencies require this filing if they plan to accept a certain amount of money from an investor.

There are some reasons why incorporating sooner is recommended. One reason is that you can avoid spending money on legal forms. Many investors do not care about the form, and all they want is cash from your business. If you incorporate your business early, you can skip this paperwork and save your money before you receive any cash. Another reason is that many of the state laws for incorporating vary from state to state. Unless you incorporate in every state, there is no way to be sure which state’s laws apply to your business, so make sure you do all your checks beforehand.