Many clients incorporate to avoid personal liability and to shield personal assets. Every corporation is assigned a unique taxpayer identification number, or EIN, and is treated separate and distinct from its individual members or shareholders for tax and other purposes such as liability.

Assuming corporate formalities are followed and absent fraud, the officers and members of a C Corporation cannot be held personally responsible or liable for the debts of the corporation.

Some benefits of forming a C corporation are as follows:

• Protection of personal assets;
• Avoidance of personal liability for corporate acts, errors or omissions;
• Certain C corporation business expenses may be tax-deductible;
• C corporations are generally audited less frequently than sole proprietorships;
• Flexibility with regard to the number of shareholders;
• Ownership can be easily amended and altered;
• C corporations have a perpetual existence;
• C corporations can increase capital by offering additional ownership interests;
• C corporations may appear more robust and secure to potential clients as opposed to a business run as a sole proprietorship;
• C corporations may receive more favorable tax treatment;