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When is the right time to incorporate a company?
When is the right time to incorporate a company?
Updated over a week ago

Founders often wonder when the right time to incorporate a company is and may choose to delay because it can be expensive and confusing. In most cases, it is best to incorporate as early as possible.

Once you have a company, you can begin taking advantage of the corporate benefits such as limited liability if you are entering into contracts or lease agreements. If you have multiple founders and advisors, it is a good idea to incorporate a company and formalize everybody’s equity ownership.

One of the most valuable assets of a business is likely to be the ownership of its intellectual property rights. The earlier a company is incorporated, the earlier it can acquire ownership of those intellectual property rights from the founders or other creators (such as software developers). If you postpone the process and try to achieve this later, possibly after the original creator has left the business, it can be problematic and costly. There may also be tax implications if you delay incorporating your company to a time when your company as a value.

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