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Accounting & Bookkeeping & Small Business Forum
Accounting, Bookkeeping, Marketing, and Small Business Resource
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| Posted: Wed Mar 19, 2003 9:00 pm Post subject: Sole Proprietor Vs. S Corporation |
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| I have a bookkeeping business as a part time income. My gross sales per year are about 8,000, and I think it may go up to 20,000 in the next year or so. Could you give your opinion when I should start to think to incorporate my business?? Is a 20,000 gross sales business big enough to justify the paperwork to incorporate. thank for your comments |
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Guest
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| Posted: Fri Mar 21, 2003 9:00 pm Post subject: Re: Sole Proprietor Vs. S Corporation |
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| Ask yourself why you are in business. If you are in business because its more of a hobby than a wealth building venture, then it really does not matter wheter you incorporate or not. However,if you are trying to build wealth, then the personal asset protection and lower taxes (vs. those charged at the personal income level) corporations afford, is for you. I would look into forming a subchapter S corporation. This structure allows for personal asset protection in the case of law suit, and allows profits from the business to be taxed only once, at the personal income level. However,if the corporation will have real estate holdings, you should consider forming an LLC. This structure offers stronger protection of real estate assets when such are held for business purposes. Obtain counsel from your lawyer and or CPA for further clarification and to substantiate my advice. |
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Guest
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| Posted: Thu Mar 20, 2003 9:00 pm Post subject: Re: Sole Proprietor Vs Corporations |
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| When you decide to hire your first employee, it's a good time to think of incorporating (unless that person is a family member, of course). |
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| Posted: Mon Jun 02, 2003 9:00 pm Post subject: Re: Why Is Incorporating Good When Employees Are Hired? |
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| Bryan, Can you please elaborate on your answer on why you think it would be a good idea to incorporate when you have employees? There are many sole proprietors small businesses who have employees and do not incorporate. |
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Guest
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| Posted: Wed Oct 29, 2003 4:52 am Post subject: RE: Re: Sole Proprietor Vs Corporations |
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I would agree with this response. A corporation is used for asset protection. The problem is that if you are the only person in your company, all of the liablity is on you anyway. If you are sued and the insurance does not cover everything, you can be held responsible. As a corporation what the corp does not cover they can come after you personally.
After you have employees you no longer carry 100% of the liability.
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