Should you incorporate?

If you don’t like getting sued, incorporation can save you a great deal of aggravation.
First of all, let me say that I’m not a lawyer, I don’t pretend to be a lawyer, and I have no intention of becoming a lawyer (much to the disappointment of my mother).  And “a fool is his own lawyer…”
But here goes anyway.  
A corporation shields its owners (i.e. you) from certain legal damages.  If someone doesn’t like your blog or gets sick from your mail-order vitamins, or considers your self-published book to be libelous, they can sue you.  If you’re organized as a corporation, then only your business is at risk.  But if you’re not organized as a corporation, then your business and your personal assets are both at risk.  
The fact is, if you’re not organized as a corporation, then you – the owner – can more easily be held personally responsible for the debts of your business.
Incorporation will protect you from these dangers.  It’s very easy to incorporate – you can go to a website like mycorporation.com.  
Needless to say, incorporation costs money.  Don’t incur the cost of incorporating unless you are committed to building up your business.

About Mark P. Holtzman

Chair of Accounting Department at Seton Hall University. PhD from The University of Texas at Austin. Worked at Deloitte's New York Office. BSBA from Hofstra University.

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