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Accounting & Bookkeeping & Small Business Forum
Accounting, Bookkeeping, Marketing, and Small Business Resource
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| Posted: Sun Jul 20, 2003 9:00 pm Post subject: Corporation versus Sole proprietorship |
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A sole proprietorship does not reduce liability to the assets of the entity, that protection is only offered by a corporation, and never in the case of criminal culpability [for either entity type].
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Guest
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| Posted: Sun Jul 20, 2003 9:00 pm Post subject: Re: Corporation versus Sole Proprietorship |
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The assets of a sole proprietor, i.e. his house are legal fare in the case of an employee lawsuit against the company. In the case of a corporation, unless there is criminal culpability, the assets of the corporation and not its owners assets are legal fare. There is no sound reason why any employer ought to operate as a sole proprietorship, it is foolish. In fact, instances where a sole proprietor is a desirable entity type are nearly zero, however, many many individuals run sole proprietorships.
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| Posted: Tue Aug 26, 2003 3:09 pm Post subject: RE: Re: Corporation versus Sole Proprietorship |
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| Sorry Dan, I have to disagree when you say there is never a good time to be a sole proprietorship. Sole proprietorships are easy to set up, inexpensive, and the record keeping is simple. Liability risks are usually associated with the type of business that is being offered. Insurance should always be the first line of defense for both a sole proprietor and a corporation. Also, many sole proprietors don't have any assets in the first place. Sure, when you have money in the bank, a nice home, and the type of business that lends itself to possible lawsuits, get incorporated. Otherwise, why waste the money and extra hassle? |
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Guest
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| Posted: Mon Sep 01, 2003 6:53 am Post subject: RE: Corporation versus Sole proprietorship |
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A corporation also may be subject to double taxation. I know that accounting firms are usually limited to specific business formations. For example, Some states allow accounting firms to operate only as sole proprietorships, partnerships or professional corporations (PCs). Almost all states require a firm permit; many states require each office within the state to be registered. The amount of liability protection provided by a PC varies from state to state. In general, individual licensees are still personally liable for work done by them or under their direction or supervision.
If the CPA's in accounting firms are personally liable for their work then I would tend to think that liability insurance should be used. |
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