There are lots of reasons why it’s a good idea to incorporate a company through which run your business.

A company has an entirely separate existence from any of the people involved in it, whether that be shareholders, directors or employees. This separate existence means that the main benefit of incorporation for founders, who will probably be the shareholders in the company, is that shareholders are not legally liable for the company’s debts and obligations meaning a founder’s personal assets and other businesses are completely separate.

From an organisation perspective, it’s also much easier to hire employees and sign a lease.

You can also issue equity to the co-founders and other investors in the future if you have a company.

A company will also give more flexibility as a founder’s ownership interest in the company can be transferred to another person in a relatively straightforward manner. If all the assets of a business were held in one of the founder’s names, it can be time consuming and expensive to transfer each asset to a new owner.

If you are looking to pull new investors into your business, the limited liability of, and ability to transfer shares in, a company are both attractive and well understood which will make it a much more appealing investment.

The existence of a company will give the business permanence as is not dependent on one individual or group. Unless the founders choose otherwise, the company can continue to operate the business even if the management, investors and employees change.