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Re: Was Health Insurance for Engineers - Now incorporation

[Subject Prev][Subject Next][Thread Prev][Thread Next] For a one man operation, there is very little benefit in incorporation as opposed to sole proprietorship. This does not mean this is no additional protection, just the benefits are limited and only if you structure the balance of your business to take advantage of the benefits.

Incorporation does not provide protection for professional liability. However, there are limited tax benefits even for a one man show, as well as shelter from other forms of liability. If your company car is corporately owned and you are involved in an accident, your personal assets are protected whereas they would not be under sole proprietor, as an example. Talk to a good lawyer and tax attorney. The critical aspect of corporate protection for a one man operation is the corporation is "closely held" and the corporate shield can often be lost without proper separation of business and personal.

If you have other people in the firm, incorporation is immediately more beneficial. All forms of job related liability other than professional liability will be sheltered from your personal assets.

In addition to liability and tax issues, incorporation also provides an entity for transfer of ownership and a separate value in the event of the proprietor's demise.



Paul Feather PE, SE
www.SE-Solutions.net
pfeather(--nospam--at)SE-Solutions.net
----- Original Message ----- From: "Polhemus, Bill" <bill.polhemus(--nospam--at)tyson.com>
To: <seaint(--nospam--at)seaint.org>
Sent: Monday, June 06, 2005 10:34 AM
Subject: RE: Was Health Insurance for Engineers - Now incorporation


-----Original Message-----
From: Gautam Manandhar [mailto:Gautam_Manandhar(--nospam--at)ci.richmond.ca.us]
Sent: Monday, June 06, 2005 12:20 PM
To: seaint(--nospam--at)seaint.org
Subject: Re: Was Health Insurance for Engineers - Now incorporation

Jordon:

You indicated that your are a one-man team and are incorporated.  It is
my understanding that because you are a one man team, the protection
from loss of personal property generally provided by incorporating is
not avaialable for a one-man team.  Could you shed some light on the
benefits of incorporating.

-----\Original Message-----

Prior to my reading Joran's reply I'd like to put in one of my own. I
was continually told by every CPA or attorney that cared to give me an
opinion on the matter--free or paid--that there really was no advantage
for a single-person practice to become incorporated. In fact, you avoid
a whole raft of expenses like business licensing and even payment of
fees for "company registration" that has become all the rage among many
states now (and is, IMO, just an excuse to badger you for more money;
"user fees" is the new taxation, often without representation since
often the enabling legislation doesn't address how much the fees ought
to be, leaving that up to the bureaucrats. But I digress).

Yet, just about every person I ask, that is in business, is
incorporated.

I have finally concluded that "incorporation" is sort of like having a
website or a set of business cards: It gives you a perception of
legitimacy.

At least, no one, even among "the incorporated," has been able to
explain to me why they decided to incorporate other than in vague terms
like "it just seemed like I should."


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