Posted by Susanne Skarda on 2/4/13 4:15pm
Msg #453951

Incorporating your business?

Do any of you incorporate? Do you have a business license for your notary business and do you incorporate?

Reply by HSH/WA on 2/4/13 7:12pm
Msg #453993

Re: I am a sole proprietorship with no business

license. IMO incorporation will give you no protection as it is you who are the notary not the Inc. I am thinking of NSA insurance as E&O does not cover a lot of situations. The problem is where I got my E&O insurance does not offer (last time I looked) NSA insurance and I don't want to be caught in a crossfire if something comes up. Better to have both insurances under one roof.

Reply by CarolF/NC on 2/4/13 7:36pm
Msg #453998

I am not but my accountant believes I should as there are

tax advantages. May want to check your state. If you don't want to do the paperwork yourself an accountant in most states can set it up for you less than an attorney would charge.

Reply by sueharke on 2/4/13 7:53pm
Msg #453999

Re: I am not but my accountant believes I should as there are

Make sure the accountant has many years of experience in helping to decide what type of incorporation is best. Too often some accountants are on a learning curve on the subject.

Reply by Gregory/CA on 2/4/13 8:38pm
Msg #454005

I am a sole proprietorship with a dba which

required registration with the county, for the name (Simply Sign Notary). I also had to register the business with City Hall. Since I operate out of my home, there were no fees for registering with City Hall.

Reply by AR_razormac on 2/4/13 9:05pm
Msg #454011

This is something that I have been considering as I begin to offer other services since I am in a small market. I have been researching the different types of incorporations and hope that an increase in business would support this.

Reply by ArtG/KS on 2/4/13 9:54pm
Msg #454025

Correct me if I'm wrong but a friend of mine also in this business incorporated two years ago and then had to start paying into unemployment tax. Be sure you know ALL of the implications of incorporating and not only the kinds of incorporation but also the differences in each states laws regarding this. I do three services, NSA, inspections and real estate referrals under my real estate license. If you do incorporate, be sure you know the after costs, not just the incorporation costs.

Reply by sueharke on 2/4/13 10:17pm
Msg #454029

Well stated! I have seen many corporations, LLC, S-Corps where only the seminar a person putting on the seminar made money. The lack of understanding of accounting, IRS and state tax laws, what the organization can or cannot do... were never explained by the lawyer with a political science background. Also, he or she did not sit down with a qualified CPA in setting up a corp. LLC or S-Corp - he or she just signed the papers. The cost to fix the problems with the tax lawyers (in the IRS audit) and business organization attorneys (to fix the bad incorporation) were at least 10x the cost of the seminar.

Go gently if you wish to incorporate and seek the advise of qualified advisors. It is more costly up front, but there may be big back end savings as you go forward.

Reply by JanetK_CA on 2/5/13 4:27pm
Msg #454137

Yes, excellent points. I'm no expert on this, but in the past I've worked for CEOs of very small companies (one with just the two of us as employees) that were incorporated. Don't take my word for this, but something else you want to investigate are annual fees to your state, formal annual meetings with minutes to be filed, reports, etc. which may be required (and which may require not insignificant additional time and expense) and who knows what else. I don't know if sole proprietorships are exempt from these things, but I imagine they will vary greatly from state to state and even county to county. Point is, like the others have said, make sure you know the full implications of that move before taking the plunge.

Talking to a good business attorney as well as an accountant may be a very good idea.