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Should I incorporate?

   
5:38 pm on Apr 8, 2002 (gmt 0)

10+ Year Member



I've just started my own consulting/web development business and have heard differing opinions on whether I should incorporate my business or not. At this time I am the only employee and I sub-contract some of my work. Anyone have any thoughts on incorporation?
5:46 pm on Apr 8, 2002 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



Hi kevin, Welcome to WebmasterWorld!

>incorporation
Well, the taxes stink and the protection is nice. Kind of a tradeoff. Are you comfortable having your personal assets on the line?

Some info [business-law.freeadvice.com]

5:47 pm on Apr 8, 2002 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



Sent you a sticky on this kevinj
11:21 pm on Apr 9, 2002 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member



Incorporting plusses:
May be able to avoid some self-employment taxes in certain situations.
You have some personal protection from liability, but still limited.
Seems to give your biz a bit more legitimacy.

disadvantages:
Costs a couple to a few hundred bucks
Good chance you'll need a CPA
Taxes are considerably more complicated
More paperwork

Since you are just starting, you may be better off waiting until you establish yourself before getting into the mess of incorporating.

disclaimer: in my limited research these are the things I found, you may want to seek professional advice.

5:32 am on Apr 13, 2002 (gmt 0)

WebmasterWorld Administrator martinibuster is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month



Number ONE, you should get a referral to a good accountant. A good accountant can give you an informed opinion on whether it's beneficial for you to incorporate (accountants are all about money after all, so it makes sense to consult one). My accountant cost me a couple hundred bucks but he came highly recommended from serious designers and really opened my eyes about a lot of things to be aware of. In my situation, he suggested that it made economic sense to register as a sole proprietorship.
6:12 am on Apr 13, 2002 (gmt 0)

WebmasterWorld Senior Member digitalghost is a WebmasterWorld Top Contributor of All Time 10+ Year Member



Martinibuster has a good line on it. Find an accountant you trust. Mine recommmended an LLC. The sole proprietorship I had prior to that had risks (for me) that I hadn't foreseen.

I can't afford to get mucked down in the details of running a business when I have a business to run. :)

Now it's time for a Cohiba Siglo IV. My business day has ended. Cheers.

DG

5:09 am on Apr 26, 2002 (gmt 0)

10+ Year Member



Likewise I pondered whether to incorporate or not. I list below the advantages/disadvanatges in priority to me.
Advantages - The company name "protects" me against anyone trying to register a similar type .com.au domain name.
The company structure provides better protection against losing all my personal assets.
The available tax allowances are better.
Disavantages - Any (company) losses are not offset against my personal income.
There are costs of incorporation, and the for preparing & filing an annual return.
The key is to incorporate after having incurred the establishment set-up costs since they can be offset against your personal income.
9:48 am on Apr 26, 2002 (gmt 0)

WebmasterWorld Senior Member tedster is a WebmasterWorld Top Contributor of All Time 10+ Year Member



Definitely go one on one with a savvy accountant. Individual situations are exactly that - individual - and professionals know the right questions.
 

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