Incorporating…

[Anonymous]

“From the side of the corporation:
If you are doing business under a corporation and someone sues the corporation.. they can go after the corporation’s assets, but not yours.

uc, this is the scenario my friend was recommending. I form the corporation and put the assets in the corps name or have the corp buy the assets.

it may not be illegal but it is retarded. a corporation ostensibly needs to be a going concern, not just a way to shield assets from creditors.
besides, you don’t own a business or home anyway so what is the point, are you a deadbeat trying to hide your assets from creditors? If so, in a lawsuit a plaintiff against you could simply pierce the corporate shield anyway so you will derive no benefit.

larrylujack, in my profession, I am able to contract my services out with or without working for another entity. According to the person who voluntared this info to me, since I will be writing reports, I can write off the office I work in, my fax/copier/scanner, personal computer, and any other office equipment.

So, I was wondering if incorporating was worth it. My friend says it is worth it just for the asset protection alone. He says they can’t touch the corporation if the were to sue me because I am not the corporation. Also, they couldn’t touch my assets because my assets would be owned by the corp. even though I own the corp.

Also, I heard about “double taxation” anyone know about this? I was told if you form a certain type of corp. there is a way around that.

I’m just considering what my friend said at this point and asking questions.

P.S. And he said incorp. in Nevada.

[Allan from Fallbrook]

Double taxation comes with a Chapter C corporation. You are taxed once as a corporation, and then again as an individual (in the case of dividends, corporate income, etc). You can avoid the double taxation bugaboo by incorporating as a Subchapter S corporation.

Don’t incorporate in Nevada if you can help it. Nevada corporations are a favorite of the IRS when it comes to auditing. That being said, however, your best bet is to pay an attorney for a few hours of their time and get proper advice.

I don’t know that putting your house into the corporation’s name is such a good idea, though. It sounds as like you might be more interested in an APT (asset protection trust). Again, speak with an attorney. My background is in accounting and finance. I understand corporations from that perspective, but you need an attorney specializing in corporate formation and business law.

[Allan from Fallbrook]

Double taxation comes with a Chapter C corporation. You are taxed once as a corporation, and then again as an individual (in the case of dividends, corporate income, etc). You can avoid the double taxation bugaboo by incorporating as a Subchapter S corporation.

Don’t incorporate in Nevada if you can help it. Nevada corporations are a favorite of the IRS when it comes to auditing. That being said, however, your best bet is to pay an attorney for a few hours of their time and get proper advice.

I don’t know that putting your house into the corporation’s name is such a good idea, though. It sounds as like you might be more interested in an APT (asset protection trust). Again, speak with an attorney. My background is in accounting and finance. I understand corporations from that perspective, but you need an attorney specializing in corporate formation and business law.

[Allan from Fallbrook]

Double taxation comes with a Chapter C corporation. You are taxed once as a corporation, and then again as an individual (in the case of dividends, corporate income, etc). You can avoid the double taxation bugaboo by incorporating as a Subchapter S corporation.

Don’t incorporate in Nevada if you can help it. Nevada corporations are a favorite of the IRS when it comes to auditing. That being said, however, your best bet is to pay an attorney for a few hours of their time and get proper advice.

I don’t know that putting your house into the corporation’s name is such a good idea, though. It sounds as like you might be more interested in an APT (asset protection trust). Again, speak with an attorney. My background is in accounting and finance. I understand corporations from that perspective, but you need an attorney specializing in corporate formation and business law.

[Allan from Fallbrook]

Double taxation comes with a Chapter C corporation. You are taxed once as a corporation, and then again as an individual (in the case of dividends, corporate income, etc). You can avoid the double taxation bugaboo by incorporating as a Subchapter S corporation.

Don’t incorporate in Nevada if you can help it. Nevada corporations are a favorite of the IRS when it comes to auditing. That being said, however, your best bet is to pay an attorney for a few hours of their time and get proper advice.

I don’t know that putting your house into the corporation’s name is such a good idea, though. It sounds as like you might be more interested in an APT (asset protection trust). Again, speak with an attorney. My background is in accounting and finance. I understand corporations from that perspective, but you need an attorney specializing in corporate formation and business law.

[Allan from Fallbrook]

Double taxation comes with a Chapter C corporation. You are taxed once as a corporation, and then again as an individual (in the case of dividends, corporate income, etc). You can avoid the double taxation bugaboo by incorporating as a Subchapter S corporation.

Don’t incorporate in Nevada if you can help it. Nevada corporations are a favorite of the IRS when it comes to auditing. That being said, however, your best bet is to pay an attorney for a few hours of their time and get proper advice.

I don’t know that putting your house into the corporation’s name is such a good idea, though. It sounds as like you might be more interested in an APT (asset protection trust). Again, speak with an attorney. My background is in accounting and finance. I understand corporations from that perspective, but you need an attorney specializing in corporate formation and business law.

[Troubled Loner]

I’m a professional in the tax field, and I feel the need to address these issues. There is a lot of misinformation out there! I get similar questions all the time from my small business owner clients who are considering incorporating, and seem to be under the impression that a corporation is the greatest thing in the world.

1) re tax issues and corporations, double taxation does occur with a C corporation; this can be avoided by choosing to be taxed as an “S” corporation, where all profits flow through to the shareholder(s). However, until net profit is at least $30,000 or more, it is generally not advantageous from a tax perspective for someone to be incorporated, due to the ability to have some of their income be distributions that avoid the 15.3% self-employment tax. Some things to consider, if a small business goes from a sole proprietor to an “S” corporation, and that small business was taking the home office deduction, they cannot take that deduction as a corporation. For many clients, this results in the loss of a substantial expense deduction. Also, once becoming a corporation they must become an employee of the corporation, which brings on all the hassle of payroll and regular IRS reports and filings; most people pay a payroll company such as Paychex to do their payroll, thus taking on more expenses. Another expense is the annual $800 which must be paid to California. Also, certain benefits that one can set up as a sole proprietor cannot be utilized as an S corporation. Keep in mind all the formalities of starting and maintaining a corporation. It has to done right, and maintained legitimately, otherwise the corporation will not be taken seriously if challenged (“piercing the corporate veil”).

2) re: asset protection of a corporation – typically those who stand to benefit the most from incorporating are those who own a business and have employees who could potentially do harm to others, for example a delivery driver who hits a pedestrian with the company car while on duty. In this example, if the corporation were to get sued, only the assets in the corporation are exposed. Conversely, if a sole proprietor’s employee were to hit someone with their car and were sued, none of the owner’s personal or business assets would be protected, such that their house, car, savings, etc would be exposed.

There seems to be a belief that if someone is incorporated that they can get away with just about anything and not be exposed to legal action and/or loss of their personal assets. This is not true. If you negligently run down someone on the street and get sued, the corporation is not going to protect you and your assets.

3) Nevada corporations – unless you want to hide your identity, becoming a Nevada corporation is a waste of additional time and resources (same with a Nevada LLC). Some think that they can avoid the $800 California FTB annual tax, this is not true, they must register with CA if they are doing business in CA, and still pay the $800. Plus you need to have someone in Nevada be available for service (they’re not going to do this for free…)

None of this is to be taken as tax advice. This is general information, each person’s individual situation needs to be evaluated to determine what business entity works best for them.

[Troubled Loner]

I’m a professional in the tax field, and I feel the need to address these issues. There is a lot of misinformation out there! I get similar questions all the time from my small business owner clients who are considering incorporating, and seem to be under the impression that a corporation is the greatest thing in the world.

1) re tax issues and corporations, double taxation does occur with a C corporation; this can be avoided by choosing to be taxed as an “S” corporation, where all profits flow through to the shareholder(s). However, until net profit is at least $30,000 or more, it is generally not advantageous from a tax perspective for someone to be incorporated, due to the ability to have some of their income be distributions that avoid the 15.3% self-employment tax. Some things to consider, if a small business goes from a sole proprietor to an “S” corporation, and that small business was taking the home office deduction, they cannot take that deduction as a corporation. For many clients, this results in the loss of a substantial expense deduction. Also, once becoming a corporation they must become an employee of the corporation, which brings on all the hassle of payroll and regular IRS reports and filings; most people pay a payroll company such as Paychex to do their payroll, thus taking on more expenses. Another expense is the annual $800 which must be paid to California. Also, certain benefits that one can set up as a sole proprietor cannot be utilized as an S corporation. Keep in mind all the formalities of starting and maintaining a corporation. It has to done right, and maintained legitimately, otherwise the corporation will not be taken seriously if challenged (“piercing the corporate veil”).

2) re: asset protection of a corporation – typically those who stand to benefit the most from incorporating are those who own a business and have employees who could potentially do harm to others, for example a delivery driver who hits a pedestrian with the company car while on duty. In this example, if the corporation were to get sued, only the assets in the corporation are exposed. Conversely, if a sole proprietor’s employee were to hit someone with their car and were sued, none of the owner’s personal or business assets would be protected, such that their house, car, savings, etc would be exposed.

There seems to be a belief that if someone is incorporated that they can get away with just about anything and not be exposed to legal action and/or loss of their personal assets. This is not true. If you negligently run down someone on the street and get sued, the corporation is not going to protect you and your assets.

3) Nevada corporations – unless you want to hide your identity, becoming a Nevada corporation is a waste of additional time and resources (same with a Nevada LLC). Some think that they can avoid the $800 California FTB annual tax, this is not true, they must register with CA if they are doing business in CA, and still pay the $800. Plus you need to have someone in Nevada be available for service (they’re not going to do this for free…)

None of this is to be taken as tax advice. This is general information, each person’s individual situation needs to be evaluated to determine what business entity works best for them.

[Troubled Loner]

I’m a professional in the tax field, and I feel the need to address these issues. There is a lot of misinformation out there! I get similar questions all the time from my small business owner clients who are considering incorporating, and seem to be under the impression that a corporation is the greatest thing in the world.

1) re tax issues and corporations, double taxation does occur with a C corporation; this can be avoided by choosing to be taxed as an “S” corporation, where all profits flow through to the shareholder(s). However, until net profit is at least $30,000 or more, it is generally not advantageous from a tax perspective for someone to be incorporated, due to the ability to have some of their income be distributions that avoid the 15.3% self-employment tax. Some things to consider, if a small business goes from a sole proprietor to an “S” corporation, and that small business was taking the home office deduction, they cannot take that deduction as a corporation. For many clients, this results in the loss of a substantial expense deduction. Also, once becoming a corporation they must become an employee of the corporation, which brings on all the hassle of payroll and regular IRS reports and filings; most people pay a payroll company such as Paychex to do their payroll, thus taking on more expenses. Another expense is the annual $800 which must be paid to California. Also, certain benefits that one can set up as a sole proprietor cannot be utilized as an S corporation. Keep in mind all the formalities of starting and maintaining a corporation. It has to done right, and maintained legitimately, otherwise the corporation will not be taken seriously if challenged (“piercing the corporate veil”).

2) re: asset protection of a corporation – typically those who stand to benefit the most from incorporating are those who own a business and have employees who could potentially do harm to others, for example a delivery driver who hits a pedestrian with the company car while on duty. In this example, if the corporation were to get sued, only the assets in the corporation are exposed. Conversely, if a sole proprietor’s employee were to hit someone with their car and were sued, none of the owner’s personal or business assets would be protected, such that their house, car, savings, etc would be exposed.

There seems to be a belief that if someone is incorporated that they can get away with just about anything and not be exposed to legal action and/or loss of their personal assets. This is not true. If you negligently run down someone on the street and get sued, the corporation is not going to protect you and your assets.

3) Nevada corporations – unless you want to hide your identity, becoming a Nevada corporation is a waste of additional time and resources (same with a Nevada LLC). Some think that they can avoid the $800 California FTB annual tax, this is not true, they must register with CA if they are doing business in CA, and still pay the $800. Plus you need to have someone in Nevada be available for service (they’re not going to do this for free…)

None of this is to be taken as tax advice. This is general information, each person’s individual situation needs to be evaluated to determine what business entity works best for them.

[Troubled Loner]

I’m a professional in the tax field, and I feel the need to address these issues. There is a lot of misinformation out there! I get similar questions all the time from my small business owner clients who are considering incorporating, and seem to be under the impression that a corporation is the greatest thing in the world.

1) re tax issues and corporations, double taxation does occur with a C corporation; this can be avoided by choosing to be taxed as an “S” corporation, where all profits flow through to the shareholder(s). However, until net profit is at least $30,000 or more, it is generally not advantageous from a tax perspective for someone to be incorporated, due to the ability to have some of their income be distributions that avoid the 15.3% self-employment tax. Some things to consider, if a small business goes from a sole proprietor to an “S” corporation, and that small business was taking the home office deduction, they cannot take that deduction as a corporation. For many clients, this results in the loss of a substantial expense deduction. Also, once becoming a corporation they must become an employee of the corporation, which brings on all the hassle of payroll and regular IRS reports and filings; most people pay a payroll company such as Paychex to do their payroll, thus taking on more expenses. Another expense is the annual $800 which must be paid to California. Also, certain benefits that one can set up as a sole proprietor cannot be utilized as an S corporation. Keep in mind all the formalities of starting and maintaining a corporation. It has to done right, and maintained legitimately, otherwise the corporation will not be taken seriously if challenged (“piercing the corporate veil”).

2) re: asset protection of a corporation – typically those who stand to benefit the most from incorporating are those who own a business and have employees who could potentially do harm to others, for example a delivery driver who hits a pedestrian with the company car while on duty. In this example, if the corporation were to get sued, only the assets in the corporation are exposed. Conversely, if a sole proprietor’s employee were to hit someone with their car and were sued, none of the owner’s personal or business assets would be protected, such that their house, car, savings, etc would be exposed.

There seems to be a belief that if someone is incorporated that they can get away with just about anything and not be exposed to legal action and/or loss of their personal assets. This is not true. If you negligently run down someone on the street and get sued, the corporation is not going to protect you and your assets.

3) Nevada corporations – unless you want to hide your identity, becoming a Nevada corporation is a waste of additional time and resources (same with a Nevada LLC). Some think that they can avoid the $800 California FTB annual tax, this is not true, they must register with CA if they are doing business in CA, and still pay the $800. Plus you need to have someone in Nevada be available for service (they’re not going to do this for free…)

None of this is to be taken as tax advice. This is general information, each person’s individual situation needs to be evaluated to determine what business entity works best for them.

[Troubled Loner]

I’m a professional in the tax field, and I feel the need to address these issues. There is a lot of misinformation out there! I get similar questions all the time from my small business owner clients who are considering incorporating, and seem to be under the impression that a corporation is the greatest thing in the world.

1) re tax issues and corporations, double taxation does occur with a C corporation; this can be avoided by choosing to be taxed as an “S” corporation, where all profits flow through to the shareholder(s). However, until net profit is at least $30,000 or more, it is generally not advantageous from a tax perspective for someone to be incorporated, due to the ability to have some of their income be distributions that avoid the 15.3% self-employment tax. Some things to consider, if a small business goes from a sole proprietor to an “S” corporation, and that small business was taking the home office deduction, they cannot take that deduction as a corporation. For many clients, this results in the loss of a substantial expense deduction. Also, once becoming a corporation they must become an employee of the corporation, which brings on all the hassle of payroll and regular IRS reports and filings; most people pay a payroll company such as Paychex to do their payroll, thus taking on more expenses. Another expense is the annual $800 which must be paid to California. Also, certain benefits that one can set up as a sole proprietor cannot be utilized as an S corporation. Keep in mind all the formalities of starting and maintaining a corporation. It has to done right, and maintained legitimately, otherwise the corporation will not be taken seriously if challenged (“piercing the corporate veil”).

2) re: asset protection of a corporation – typically those who stand to benefit the most from incorporating are those who own a business and have employees who could potentially do harm to others, for example a delivery driver who hits a pedestrian with the company car while on duty. In this example, if the corporation were to get sued, only the assets in the corporation are exposed. Conversely, if a sole proprietor’s employee were to hit someone with their car and were sued, none of the owner’s personal or business assets would be protected, such that their house, car, savings, etc would be exposed.

There seems to be a belief that if someone is incorporated that they can get away with just about anything and not be exposed to legal action and/or loss of their personal assets. This is not true. If you negligently run down someone on the street and get sued, the corporation is not going to protect you and your assets.

3) Nevada corporations – unless you want to hide your identity, becoming a Nevada corporation is a waste of additional time and resources (same with a Nevada LLC). Some think that they can avoid the $800 California FTB annual tax, this is not true, they must register with CA if they are doing business in CA, and still pay the $800. Plus you need to have someone in Nevada be available for service (they’re not going to do this for free…)

None of this is to be taken as tax advice. This is general information, each person’s individual situation needs to be evaluated to determine what business entity works best for them.

[VoZangre]

tHAT bIG iDEA

Read twixt the lines, my fellow little Piggies!

Marion is OBviously the patent holder on the newest bestest betterest mousetrap that ever was or will be!

Soon those pesky hanta-virus vectors, the disgusting murine marauders will be going down like nobody’s business… her accounts will be swelling like the Nile in flood season, and she’ll be buying up property’s like they was hotcakes soggy with molasses…

the glory will be amazingly healthy for her skin and she will glow likes she’s preggers and still be as slim as Gywneth Paltrow ( though much better looking )

and then, and ONLY then, will she hold interviews for her personal potential Romeo…

ciao for now…

Voz

[VoZangre]

tHAT bIG iDEA

Read twixt the lines, my fellow little Piggies!

Marion is OBviously the patent holder on the newest bestest betterest mousetrap that ever was or will be!

Soon those pesky hanta-virus vectors, the disgusting murine marauders will be going down like nobody’s business… her accounts will be swelling like the Nile in flood season, and she’ll be buying up property’s like they was hotcakes soggy with molasses…

the glory will be amazingly healthy for her skin and she will glow likes she’s preggers and still be as slim as Gywneth Paltrow ( though much better looking )

and then, and ONLY then, will she hold interviews for her personal potential Romeo…

ciao for now…

Voz

[VoZangre]

tHAT bIG iDEA

Read twixt the lines, my fellow little Piggies!

Marion is OBviously the patent holder on the newest bestest betterest mousetrap that ever was or will be!

Soon those pesky hanta-virus vectors, the disgusting murine marauders will be going down like nobody’s business… her accounts will be swelling like the Nile in flood season, and she’ll be buying up property’s like they was hotcakes soggy with molasses…

the glory will be amazingly healthy for her skin and she will glow likes she’s preggers and still be as slim as Gywneth Paltrow ( though much better looking )

and then, and ONLY then, will she hold interviews for her personal potential Romeo…

ciao for now…

Voz

[VoZangre]

tHAT bIG iDEA

Read twixt the lines, my fellow little Piggies!

Marion is OBviously the patent holder on the newest bestest betterest mousetrap that ever was or will be!

Soon those pesky hanta-virus vectors, the disgusting murine marauders will be going down like nobody’s business… her accounts will be swelling like the Nile in flood season, and she’ll be buying up property’s like they was hotcakes soggy with molasses…

the glory will be amazingly healthy for her skin and she will glow likes she’s preggers and still be as slim as Gywneth Paltrow ( though much better looking )

and then, and ONLY then, will she hold interviews for her personal potential Romeo…

ciao for now…

Voz

[Author]

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