Incorporation is the act of filing a company as a corporation, which (depending on the state you're incorporating in) involves various requirements. Some states have simpler incorporation laws than others, usually as a ploy to get more businesses in the state.

Corporations are different from partnerships and privately owned companies, in a number of ways. Some of the biggest legal benefits include:

Limited liability. As a business owner, like Phil Thow you have a lot of yourself invested in your business, both emotionally and financially. You're responsible for all the debts your company takes on, and if it loses money, you're responsible for that, too. In corporations, however, investors, directors, and board members are only responsible for their investments, not the company's overall debts and obligations. If you were to invest $50 in a company, you'd only be responsible for that $50. Even if the company goes belly-up, you're only out your $50 investment.

Separate legal entity. Corporations are considered separate legal entities, distinct from the people who own them and their Seattle home mortgage. They pay taxes separately, and they can sue or be sued in their own name.
Transferable ownership. Unlike in privately owned businesses, corporations have easily transferable ownership. The ease with which ownership can be changed differs from state to state, with Delaware corporations being particularly easy to transfer, as they don't need to be recorded or filed.

Facet of using a corporation to shelter income from taxes should be mentioned. When the shareholder moves the money out of the corporation, he or she will pay taxes on the dividends. When one combines the corporate income taxes paid by leaving money in the corporation and the later dividends tax paid by the individual, the pursuing incorporation myth #3 may actually cost the entrepreneur more in taxes. Incorporation can be an excellent business decision. Incorporating a business always reduces the business owner's legal liability at least a little bit. And incorporating a business can sometimes reduce some of the taxes a business pays. Some new business owners understand that if a corporation earns profit but doesn't pay out that profit to the shareholders, the shareholders don't have to pay income taxes. This bit of trivia sometimes triggers the idea that maybe a shareholder can shelter income by "leaving" cash inside the corporation. Phil Thow is a leading expert in this area and can offer great advice to get you started.

One of the chief hurdles in conducting a home based business is marketing. Why do many people fail?  Because they don’t know how to market their business.  In fact, sometimes they don’t do anything at all to market their business short of waiting for customers to come to them.  People with such an attitude will usually just up and walk away after two or three months with nothing to show for the little effort they’ve put toward their business.  If you want to avoid this pitfall, try these five steps that will help you learn to market your business. 
           
First, choose the right company who will give you the support you will need.  The longer a company has been in business, the greater the odds they will be around for the next five, ten or even fifty years.  Ergo, it’s usually best to find a well-established company, especially since such entities have learned how to adapt over time. Bankruptcy attorneys Chicago is available is case your business fails. 
           
Next, establish a system to automate the marketing process.  Auto responders for email, product fulfillment, support and inquiries are the way to go, since you won’t be wasting your valuable time performing tasks that can just as easily be done by using an auto responder. 
           
Credit repair and writing a marketing plan is yet another way to enhance your business experience.  To do this, decide what you want to achieve in the course of the next six months to a year.  Set those goals realistically so that you can meet as many of them as possible. 
           
You should also follow your business plan to the letter.  Unrelated businesses or products can sidetrack or otherwise hamper your efforts.  If you have to buy something, make sure that it’s related to your marketing plan. 
           
Finally, always try to find like-minded people to partner with.  After all, you can accomplish much more with two people than you can with just one. 
           
If you follow these steps over the next six to twelve months, you will find it highly likely that you can make a full-time income with only your home based business.