Posted by KC/IN on 11/5/04 2:47pm
Msg #10948

Benefits of starting your own business?

I live in Indiana and have been doing closings on the side for the past year and a half. Would it benefit me (as far as tax purposes go) to do signings as an independant or should I create an LLC or corporation and do signings under a business name? Anybody have any insight on this?

Reply by suzanne-fl on 11/5/04 2:57pm
Msg #10950

there are some tax benefits to forming a subchapter s corp - you would need to talk to your accountant for specifics

Reply by KC/IN on 11/5/04 2:59pm
Msg #10951

Should you have to make a certain amount of money before it would be a benefit or should I ask the accountant that also?

Reply by suzanne-fl on 11/5/04 4:45pm
Msg #10956

check with your accountant, i have a sub s corp and i have saved alot on taxes - but everyone is different

Reply by CarolynCO on 11/7/04 4:44pm
Msg #10991

With an open forum, you need to read with open eyes and believe only a little of what you read as true fact. For something as important as incorporting, without hesitation, discuss the subject with both an attorney and an accountant. You've already read the differences of opinions and advice in this thread, and the one thing I do agree with, is that all situations are diffrerent -- and that is where the accountant and attorney come into the picture.

Reply by HisHughness on 11/6/04 5:15pm
Msg #10980

I personally do not know of any tax or other type benefits derived from operating as a sub-chapter S corporation, especially a small corporation, except for one that is more illusory than real. If you can find other businesses dumb enough to extend credit to the sub-chapter S without requiring personal libability, then the S-CS is advantageous. Otherwise, it basically just adds to your paperwork burden on April 15.

Reply by Jennifer on 11/5/04 5:08pm
Msg #10957

Every few years I look at whether or not I would save money in taxes if I incorporated. For me, I would always wind up paying more taxes. But I believe Suzanne when she says it helps her.

Situations and what's appropriate vary widely according to individual situations and taxes in each state. Definitely talk with a tax advisor before deciding what to do.

Reply by Ed/Ca on 11/6/04 8:25am
Msg #10970

A question I have is, as a corporation, would you be protected from law suits that aren't covered with the E&O Insurance? Thanks for any info.

Reply by Jon on 11/6/04 8:38am
Msg #10972

As a corporation you usually will have protection of your personal assets. The corporation assets will not be protected in the event of a lawsuit. However, if the injured party can show that you are not conducting business as a corporation, your personal assets may be included in the suit.

Before incorporating or forming an LLC, I suggest consulting with a lawyer to make sure you have everything setup correctly. They can also let you know exactly how to keep your business seperate from your personal assets.

Reply by Notary on 11/6/04 10:15pm
Msg #10987

Almost correct.

A corporation is a separate entity from you as an individual. So long as you do not do anything that makes you personally liable, you cannot be held liable for the debts of the corporation.

Also, to maintain this protection, you must operate your corporation as a separate entity from yourself. You cannot use the assets of the corporation as your personal assets. Transfer of assets from the corporatoin must be based upon a legitimate contractual relationship between you and the corporation (i.e. salary, bonuses, sale of assets, etc.) For example, you shouldn't write checks out of your corporate account to pay for your son's karate lessons. Actions such as these could allow someone to pierce the corporate veil.

Reply by PAW Notary Services on 11/6/04 12:18pm
Msg #10973

Your personal assets may be protected for your NON-NOTARY work. In most states, as a Notary Public, you are PERSONALLY liable for proper notarizations and are not afforded protection as a business, since YOU, personally, are commissioned, not the business entity. That's why E&O insurance is important for your notary work. Even with bonding and E&O insurance, if there is a judgment and subsequent payment by the bonding or insurance company on your behalf, they in turn will seek repayment from you, personally, to recoup their losses.

Reply by Notary on 11/6/04 10:09pm
Msg #10986

Actually, your personal assets would be protected only if the person bringing a claim against your company did not bring a successful action against you. It has nothing to do with your doing notary or non-notary work.

Say your corporation obtains a credit card in the corporation's name WITHOUT a personal guarantee from you, ONLY the corporation would be liable for payment. Therefore, theorectically speaking, liability would not attach to you personally.

Say that you, as a notary, a closer, a signing agent, etc. do something negligent, you could be personally liable even though you have a corporation.

However, say you have an employee who does something negligent witout your being personally negligent. You could once again avoid personal liability.

These examples as base upon your running your corporation as a separate entity from yourself.