Why Should You Incorporate Your Entrepreneurial Ministry?

October 10th, 2009 // 1:12 pm @ David Phillips

Starting a new ministry is a great endeavor, especially if you are innovative and are trying to put an entrepreneurial spin on it.  But there are inherent risks with simply starting a business or ministry and not considering the financial, legal, and public relation implications of your endeavor could be disastrous personally.

Entrepreneurial ministry will often find itself in being for-profit, not non-profit.  Regardless the same mentality must apply:  ministry has a business side.  The government views ministry this way on some levels, and this must be taken very seriously.  So in the inaugural post of Entrepreneurial Ministry, I want to give you 5 reasons why you should incorporate your entrepreneurial ministry:

1. Personal Asset Protection-By incorporating or forming a limited liability company, you make a distinction between your personal assets (house, checking account, auto, etc.) and your business. If your ministry is sued, and you are incorporated, in most cases your personal assets will have a degree of protection not afforded under sole proprietorships or partnerships.
2. Increase Credibility with Clients and Customers-A business that has “Inc.,” “Company” or “Corporation” after its name generally indicates a higher degree of professionalism and seriousness of purpose. This can be particularly useful if you intend to sell shares of stock to raise capital.
3. Tax Deductions-A corporation can reduce the amount of tax that is due to the IRS by deducting any costs that are related to the business in the pursuit of profit. These charges can include operating expenses and advertising costs, as well as the salaries, bonuses, and medical and retirement payments paid to employees.
4. Ability to Raise Capital by Issuing Shares of Stock-If a corporation needs more capital, the owners can issue shares of stock to investors. Capital can be raised in this way whether a company is a startup or is an established firm that is looking to expand.
5. Corporations Are the Most Enduring Legal Structure-A corporation is the oldest legal structure. They are entities that continue even if an owner dies or decides to sell a business. Because of its long history, there is also a wealth of case law to refer to in the event of a corporate lawsuit.

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