Starting a Business...Should I Incorporate???

[s***@yahoo.ca]

Hello,

As a sideline for extra income, I'm interested in starting my own
business I have various "business ventures" that I'm interested in
exploring. For example, I have some eBooks that I'd like to market via
my own Web Site and EBay. I'm also interested in exploring the full
income potential of Google "AdWords" and "AdSense", and do some
"contract" programming / Web Development work.

My main question at this stage is in how to create the proper company
framework that will allow me to achieve these goals. I hear a lot
about people getting sued for "this and that", and I realize that I
will need a business structure to protect myself in this regard. I'm
wondering if I should set up a Corporation, or perhaps a Private "Sole
Proprietorship" Company at this stage since I haven't really realized
any revenue. Maybe I can just start selling products via my own
personal name for now...and think about companies and corporations when
the dollars start to roll in?

What if I happen to have two or three different avenues of income? For
example, maybe some contract programming work as one, selling wholesale
items on the Web as another, and maybe a bit of home repair as a third.
Can I put all three of these incomes under one single corporation?
I'm told it's expensive to pay for a corporation and this is one way I
could cut down on expenses.

I guess in a "nutshell" I'm in the "thinking stage" of my business, and
would like to ensure that I have all my "ducks in a row" as I proceed.
If you could offer me any advice or insight it would be greatly
appreciated.

Thanks.

[John A. Weeks III]

Post by s***@yahoo.ca
My main question at this stage is in how to create the proper company
framework that will allow me to achieve these goals. I hear a lot
about people getting sued for "this and that", and I realize that I
will need a business structure to protect myself in this regard.

You likely will get little protection as a one person business.
The person who does the work or signs the paperwork is liable
at a personal level, so the business structure doesn't protect
them very much.

A corporation's protections mostly kick in when you have things
like an outside board and multiple employees. In that case, if
one of the employees pinches the butt of another employee, you
don't lose your house. But if you are the pincher, all bets are
off as to what your liability might be.

Post by s***@yahoo.ca
I'm
wondering if I should set up a Corporation, or perhaps a Private "Sole
Proprietorship" Company at this stage since I haven't really realized
any revenue. Maybe I can just start selling products via my own
personal name for now...and think about companies and corporations when
the dollars start to roll in?

That is what I would suggest. Go out and do some business, and
see what materializes. Keep your accountant and attorney up to date,
and let them step in at the appropriate time.

Post by s***@yahoo.ca
What if I happen to have two or three different avenues of income? For
example, maybe some contract programming work as one, selling wholesale
items on the Web as another, and maybe a bit of home repair as a third.
Can I put all three of these incomes under one single corporation?

Yes, or under the same sole proprietorship or LLC or partnership.

Post by s***@yahoo.ca
I'm told it's expensive to pay for a corporation and this is one way I
could cut down on expenses.

Corporations are like separate people, and need separate tax returns.
There are also fees in some states, high fees in a few states. C
corporations also have the double tax issue. Work with both your
attorney and accountant to figure out the best way to go depending
on your projected sales, size, and risk profile.

Post by s***@yahoo.ca
I guess in a "nutshell" I'm in the "thinking stage" of my business, and
would like to ensure that I have all my "ducks in a row" as I proceed.
If you could offer me any advice or insight it would be greatly
appreciated.

Most people are so concerned about getting those ducks lined up
that they never go out and do any business. I suggest just the
opposite...go out and do some business. Then let the pros on your
team (attorney and accountant) take care of the ducks at the
appropriate time. Spend your time on the business, such as sales
and delivering billable work, and don't get caught up in the thick
of thin things.

-john-

[Jon]

Post by John A. Weeks III
The person who does the work or signs the paperwork is liable
at a personal level, so the business structure doesn't protect
them very much.
A corporation's protections mostly kick in when you have things
like an outside board and multiple employees.

Is that true? I run a business under an S corp, and am facing
potential bankruptcy. I owe a great deal of money to vendors, but only
"personally liable" to a couple. I think.