Visit Us


Debunking the Myths of Incorporating a Small Business

What does it truly mean to incorporate a business, anyway? For entrepreneurs unfamiliar with the process, incorporating or forming an LLC can seem like a difficult, time-consuming ordeal that they would rather save for later while focusing on their company now. More often than not, that delay is made because of the myths surrounding legal formations and their impact on small businesses. We’re debunking four of the most popular myths today as well as highlighting some of the benefits that come with legitimizing your business from the start.

The process is too complicated.

How do I get started incorporating a business? What kind of information do I need? How long does this take? As complicated as it may seem to incorporate, it’s actually not a terribly difficult process with the help of an incorporation service company.

Incorporating on your own may actually take much longer to do, and it’s always possible that you could make a couple of mistakes along the way. Working with a filing service allows them to assist you with accurately prepping and filing documents for the state including articles of incorporation and bylaws.

It’s expensive.

There is an old saying that goes, “You gotta spend money to make money.” However, startups just getting their foot in the door spend their early days bootstrapping and stretching those pennies. It’s a smart decision not to spend on anything that doesn’t provide a return on investment…like incorporating, right?

Myth debunked! While a legal formation is not ROI you can immediately see, spending money to incorporate your business ultimately helps it grow in the long run. Incorporating also provides major tax breaks and reduces your risk of being audited. Keep in mind that once you incorporate, you will also have to pay annual fees to stay compliant, but the fees are manageable on your small business which will be on its way to taking off by then.

My business doesn’t actually *need* to be incorporated.

Technically, this is kind of true. Entrepreneurs have a choice of whether or not they can incorporate and aren’t required to do it. However, while not incorporating does mean saving some money and avoiding paperwork, it also means that your business misses out on many benefits.

What benefits am I talking about, exactly? Here’s just a handful of perks that come with incorporating or forming an LLC.

  • The ability to protect your personal assets and keep them separate from that of the business.
  • Establishing credibility and professionalism with your customers much faster.
  • Limited liability against the shareholders.
  • Want to attract investors? Setting up a formal business structure they are familiar with allows investors to invest capital in your business.

I have no time in my schedule to incorporate and nobody to help me.

Entrepreneurs operate on go, go, go schedules so naturally, it’s easy to dismiss incorporating a business because you simply have no time available in your schedule. Here’s where the aforementioned filing service comes into play — they can help walk you through the process step by step and take care of everything. This gives you the peace of mind to go do what you do best: run your business!

Deborah Sweeney is the CEO of MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and on Twitter @mycorporation.

Want to learn more about the Kabbage process? Check out these helpful links:


Kabbage Team

Kabbage is here not only to provide access to the small business funding you need, but to also help you grow your business through free marketing tips, webinars, tools and more. Is there something you'd like us to cover or want to get your small business featured on our blog? Send us a note at