Small businesses can benefit from operating as corporations. If a small business is not a corporation it is most likely operating as a sole proprietor (one person) or partnership (two or more owners).

But neither a sole proprietor nor general partners in a partnership gain the protection and benefit that comes with incorporation.

The benefits of incorporation have been often stated and include, among others, a limit of liability which protects the personal assets of individuals from the debts and liabilities of the corporation. Of course, this assumes that all necessary corporate formalities are followed and personal guarantees have not been given for corporate obligations.