CONTINUOUS EXISTENCE: Advantages of Incorporation
Contact Neufeld Legal for your incorporation legal work at 403-400-4092 / 905-616-8864 or Chris@NeufeldLegal.com
A corporation's continuous existence (perpetual succession) can prove highly advantageous from a commercial and legal perspective as it provides stability, ease of ownership transfer, and superior access to capital. This continuous life means the corporation exists as a separate legal entity from its owners and management, allowing it to function without disruption even if key individuals depart, become disabled, or die.
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Business Stability and Continuity: The business's operations, contracts, and legal status are unaffected by changes in shareholders, directors, or employees. This ensures the company can continue to fulfill long-term obligations and maintain a consistent public image. It enables long-term strategic planning and investment, as management can be confident the entity will exist far into the future. It provides job security and confidence for employees and customers, who know the company won't simply dissolve due to a personal event affecting an owner.
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Attracting Investment and Capital: Investors are more willing to commit funds when they are assured the business will not suddenly cease to exist. This stability makes the corporation more appealing for both debt financing (loans) and equity financing (selling stock). The perception of permanence enhances the corporation's credibility with suppliers, lenders, and potential business partners.
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Easy Transfer of Ownership: Ownership is represented by transferable shares of stock. Shareholders can buy or sell their interests without any legal effect on the corporation's existence or operations. This liquidity makes corporate stock a more attractive asset for investors and simplifies succession planning for founders and owners.
So if you are looking to incorporate a new corporation or deal with the corporate legalities impacting your company, contact our law firm to schedule a confidential consultation with a lawyer experienced in the legal intricacies of business incorporation and commercial business development at 403-400-4092 [Alberta], 905-616-8864 [Ontario] or via email at Chris@NeufeldLegal.com.
