Business Incorporation.. should I do it?

[DeWayne]

I will only be doing power washing on a part time
basis with the option to go full time later. I want
to make my part time business legal and I'm now in
the process of researching all the licensing and
permit requirements for my proposed work area.

I have a question on the subject of incorporation.
Should I incorporate my businnes now to protect
my personal assets from any possible legal action
against my business, or should I wait and incorporate
later when the business has been established?

How many of you are incorporated and if so,
would you do it again if you were starting
from scratch like me?

Thanks....!

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[rvagnoni]

My advice would be to contact an accountant about that.

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Rick - Deck Care Plus
If people knew how hard I had to work to gain my mastery, it wouldn't seem wonderful at all. -- Michelangelo

 

[Scott Stone]

I agree with Rick. The accountant will tell you the advantages and disadvantages of incorporation. There is one thing you need to remember though, as soon as you decide you want an employee you want to incorporate and keep the check books seperate. Don't use family money for business expenses and business money for family stuff. That can get you in BIG BIG trouble with the IRS in a hurry, especially if they ever go after your assets.
BTW, the first year I was incorporated as an S-Corp I saved $10,000 in taxes.

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[Jim&Shirley]

WELCOME ABOARD DAWAYNE
OUR thoughts are you are doing it the right way Lic,Permits,EPA,EPA ENFORCEMENT,Liability insurance and equipment insurance. Liability insurance will protect you from getting sued to a certain extent.

We are not incorporated yet. You need to look at all aspects of that decision. One of the reasons we did not inc. in the beginning was even if you have to sue a customer for payment then you will HAVE to retain a lawyer. Really not worth it on 200 or 300 dollars. Lawyers don't want to take cases that small. It is the law for incorporation, we have had to represent ourselves in a case involving over $800.00 and won without the help of a lawyer. The other guy was incorporated and he had to hire one even though we didn't.

Most large companies and some homeowners want you to have at least 1,000,000.00 worth of liability insurance. This is a big help in obtaining the contracts. Without liability insurance you can forget about places like Malls, FedEx, Targets, KMarts, Wal-Mart, etc. Ours is only around 700 a year. Too cheap to try to do without.

Just our thoughts, don't mean to offend anyone

Jim & Shirley

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[GutterUP]

Hey DeWayne
I just wanted to say "thanks" for your post on the "Competition" topic. It sounds like you're in a similar place as I am - trying to learn the business while making the minimum amount of mistakes. I know I'm too cautious, but my other job is OK, so I can afford to get an education before I go wash everything in sight! These guys that have been doing this for years, or the others that jump into it full-time have a different perspective, and thats OK.

Good luck!

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[Douglas Hicks]

Talk to your accountant about taxes. At about $20,000 of taxable income is the point where it is better to be incorporated. Ask your lawyer about the cost of incorporation. Think about the change in your liabilities also, especially important if you have employees. I just incorported this summer, attorny cost was less than $500.00 Don't forget to change your insurance, business license,& get a new Tax ID # from the IRS.

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[DeWayne]

Thanks for the help everyone!

I've been reading the archives and I'm
learning a lot about what works and what
doesn't. My thanks and appreciation goes
out to Dan and everyone who contributes to
this forum. It has become an invaluable
resource for me. As you can see, my head is
spinning because of the influx of help
and information. I'm learning! LOL

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