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#167080 08/05/07 10:16 AM
Joined: Jan 2007
Posts: 59
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Incorporating or sole proprietor?Just starting out.

Joined: Aug 2005
Posts: 265
S
Member
I started out as a sole proprietor and became incorporated a year or so ago. Over the years I kept asking my accountant if I should incorporate....he kept telling me "the numbers aren't there yet". Once he saw my business hit a point where incorporating made sense, we got the ball rolling on that.
Your best bet is to talk to your accountant.


Sixer

"Will it be cheaper if I drill the holes for you?"
Sixer #167086 08/05/07 01:09 PM
Joined: Jan 2003
Posts: 1,429
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LK Offline
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Have you talked to an accountant as yet?
They can help guide you thru this process, as sixer noted. Another concern is, do you have a business plan in place, even a basic outline of how you intend to, operate, and budget, setting up your accounts, marketing the business. What are some of your goals, what area of contracting, industral, commercial, residential.

Your profile is missing information, if you could please update.

Thank you,
Les


LK #167087 08/05/07 01:15 PM
Joined: Nov 2005
Posts: 507
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Here is a short article that talks about this very issue in relation to a construction company. I haven't read the article fully, however, I did not notice any mention as to the fact that these days everyone wants a personal guarantee for credit. So even with a corporation, someone is still on the hook in those cases.

mahlere #167089 08/05/07 01:56 PM
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Originally Posted by mahlere
Here is a short article that talks about this very issue in relation to a construction company. I haven't read the article fully, however, I did not notice any mention as to the fact that these days everyone wants a personal guarantee for credit. So even with a corporation, someone is still on the hook in those cases.


The main reason some incorporate, is many insurance carriers, will not insure some contracting risk without. the shield.

LK #167097 08/05/07 05:36 PM
Joined: Jul 2007
Posts: 265
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LK is dead on the money, my insurance carrier required me to incorporate before they would write a policy for me. as to the financial end my accountant kept telling me no, but my lawyer recomended LLC to protect my personel property (home etc.) from any potential lawsuit


Jimmy

Life is tough, Life is tougher when you are stupid
Joined: Feb 2006
Posts: 138
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We incorporated day one.
Two reasons, first to lock in the company name with the state. Second reason was to protect my personnal property.

Someone can start a company next door to you with the same name if your company name is not registered at the state level. Had a problem with a local guy having nearly the same name (he used a dba, sole proprietor). He eventually went under. There are three air conditioning repair companies with essentially the same name within a 20 mile radius.
There's more bookwork, reporting, etc. but in the long run it's worth it.

PE&Master #167155 08/07/07 10:05 AM
Joined: Nov 2006
Posts: 348
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ITO Offline
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Being incorporated does not necessarily protect your personal property. If you have to get a performance bond, you will see what I mean. Also if you there a cause for a lawsuit, with a fire or injury you the master electrician can personally get sued.


101° Rx = + /_\
ITO #167420 08/12/07 10:01 AM
Joined: Feb 2006
Posts: 138
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We've not been required to bond anything yet. Maybe not taking large enough projects (nothing bigger than $150K). I think what your referring to is posting your personnal assests against the bond - and thats not good.

Incorporating does offer some protection from losing personel assets.

Nothing protects you from negligence, nor should it.

PE&Master #167478 08/13/07 08:08 AM
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Originally Posted by PE&Master
I think what your referring to is posting your personnal assests against the bond - and thats not good.


It is not good but that is how it works.

Originally Posted by PE&Master
Incorporating does offer some protection from losing personel assets.

Nothing protects you from negligence, nor should it.


A lot of folks miss the basic concept that its your business, you started it, you own it, its your asset, and if you lose it then something that belonged to you has been lost.

Yeah I know the benefits of being incorporated and have done so as well.


101° Rx = + /_\

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