There are several significant advantages to incorporating your business. One advantage of incorporating is that it protects your personal assets from potential liabilities that could occur as a result of operating the business. Because a corporation is considered by law as a separate legal entity, personal assets of the shareholders may not be at risk for satisfying corporate debts. In addition to liability protection, incorporating a business allows you to take advantage of many tax savings and deductions that are not available to sole proprietorships or other types of small businesses. Income tax rates for corporations are also lower than personal income tax rates in some cases, so corporation shareholders can potentially save a significant amount of money through the corporation.