Posted: 9/18/2006 4:38:47 PM EDT
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What in a nut shell can any type of corporation give me as far as Tax and Legal protection? In particular legal, my wife is convinced if we incorporate we are 100%, or close to it, protected personally. Been in business 10+ years in Ohio as an Owner Operator. Thanks for any clarification and links that spell it out for her wouldnt hurt and if I'm wrong I'll eat my words. Joe PS Googled and found nothing but companies wanting to Inc. me. I'll put them down as undecided. |
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It's by state. Check the secretary of state for your state (or department of revenue or some such thing). They will have lots of information You should talk with an accountant, they will set you straight for way less money than a lawyer. SEtting any of them up is easy. A corporation is a truly seperate entity. It pays taxes unto itself, and pays it's owners back (after salary) through dividends. It is also more expensive to set up, maintain and file. (it needs it's own tax return). Nonetheless, none of this is truly daunting, we are talking a couple hundred a year. There is also the Type S corporation which is really for small companies. (like yours probably) a LLC (or limited liability company) is a pretty neat trick. You get about the legal protection of a corporation with the tax simpleness of a sole proprietorship. Works pretty well. However, any good lawyer can easily pierce the corporate veil and find out who is running what and handle that if you are negligent. But business, loans, etc all work better with a company. You need a seperate checking account and you need to sign everything as the business (not as Joe Blow), or the legal protections disappear. It's not that big of deal, you just need to keep your personal life seperate from business life. You should ask this on the business and investing forum too. Again, the tax structure that is right for you depends on your business, talk with your accountant. You do have an accountant right? |