Your sole proprietorship leaves you wide open for liability problems putting all your personal assets at risk along with your business assets. Transforming to a corporation you'll need to still carry sufficient insurance but any losses will be restrict to your corporation's assets.

The corporation has unlimited continuance since it has its own legal identity. Your death or incapacity won't terminate your business.

You can maintain control of your corporation by owning the majority of outstanding shares. This way you control who will be the management officers and can appoint yourself as one. Through your control you can set all salaries for yourself and others and determine how much the corporation will retain earnings rather than distribute...

Besides choosing your salary, you can determine how much to distribute as dividends.
A corporation form allows you to raise capital for expansion because you can sell shares while maintaining your majority ownership. The strength and continuance of the corporation will also increase your ability to sell bonds or raised debt for capital.

This will help you to expand your business to another state and retain the corporation's identity. Its state income taxation will be affected by the amount of business it does in each state it is.

For additional information or if you have questions or concerns about this new rule, please feel free to contact: