Can someone explain this to me in simple (remember...I'm blonde :-)!) terminology? What are the benefits for a business to become "incorporated"? We're just a small one employee family business, but would it help me and Harry to have the those three little letters "inc" after the Webber's Garage title?

BTW...Harry wants to know also...and he's not blonde :-)!!

-- Anonymous, November 11, 2003

Answers

a corporation is legally responsible as an entity. This protects your home and personal property in the event someone in this sue happy society decides to sue your company. With a sole proprietorship, they can go after your personal property from the git go. With a corporation their potential recourse is limited to the assets of the corporation unless they can prove improper conversion of assets. Incorporation can be achieved for as little as $300 in costs and is advisable if the business has liability risks exceeding those in the coverage of your states required liability bonds.

-- Anonymous, November 11, 2003

Marcia, we've had our businesses in a corporate structure for almost 20 years. You're wise to do lots of homework first; different states' rules do vary somewhat. We got screwed royally (had to pay about 60,000 BUX TO THE STINKIN GUBMINT!) when we disolved our CA corp to move to the midwest. Were too stupid to know better, and accountants are no help whatsoever, the so-and-sos. (at least the ones we've encountered, for the most part). clue: not a good idea to dissolve a corp with lots of cash left over). I'm getting the shingles just remembering that horrid episode in our lives.

We had the farm business under the corporate umbrella, but it was unbelievably hairy as far as bookkeeping went. big pain in the rear. Like Jay said, it's mainly for liability protection; the University of MN would not hire Bren for contracting work without being incorporated.

The food business, Madwoman Foods, we have organized as an LLC, a limited liability company. It's a fairly new thing; some states don't have it yet, but I think it was a good compromise. Not nearly as complex as a regular corporation, but still has liability protections. Especially good for small companies like yours; check it out. We found lots of info at the library and bookstore.

-- Anonymous, November 11, 2003

While your eating your lobster and sipping your wine here's a site that may be helpful??? Or not....

http://www.free2copyright.com/Why_Incorporate.htm

-- Anonymous, November 11, 2003

Thanks for the info, folks!! Scary situation, EM! One thing for sure...if we ever do have to dissolve our corporation...we'll spend all the extra money first (if there is any)! That should be fun :-)!!! And Kirk...that site is very informative. Thanks for finding it. You're always such a big help! We've made an appointment with our lawyer to discuss this...along with having wills drawn up. Here we are over 50 and no wills!! Does anyone else have theirs done?

-- Anonymous, November 13, 2003

Boy I've certainly seen some horror stories about familys without wills! Barb's sis and brother-in-law died within 6 months and after 4 years and thousands of lawyer costs the kids still are fighting over the stuff!! Its incredible what happens to some familys.

Wise, wise thing to keep you affairs in order huh?

-- Anonymous, November 13, 2003