Business question!!!

[BCrouse]

What are the differences between Corporations, Incorporated and Enterprises in tax and protecting your self in starting your own business?


Thank you,

[Eric Wing]

What are the differences between Corporations, Incorporated and Enterprises in tax and protecting your self in starting your own business?


Thank you,
Corporations and incorporated are the same thing. Enterprises is just a name. either way have insurance. lots of it. and a Lawyer. It costs 1,000 to become incorporated, so you can't personally get sued. Your business goes bankrupt, but you personally aren't liable.

[sid.fontenot550]

Corporations and incorporated are the same thing. Enterprises is just a name. either way have insurance. lots of it. and a Lawyer. It costs 1,000 to become incorporated, so you can't personally get sued. Your business goes bankrupt, but you personally aren't liable.

Look into LLC's. (limited liabilty companies).

[Wanderer]

What are the differences between Corporations, Incorporated and Enterprises in tax and protecting your self in starting your own business?


Thank you,
Interesting question. I'm going to move this from the CWC forum to this one, as I think it would be beneficial.

Thanks.

[DarrenYoung]

Corporations and incorporated are the same thing. Enterprises is just a name. either way have insurance. lots of it. and a Lawyer. It costs 1,000 to become incorporated, so you can't personally get sued. Your business goes bankrupt, but you personally aren't liable.
Laws of course vary by state (US) but to some degree, how a business is or can be organized is somewhat consistent because of federal regulations, taxes, etc.

Just because you incorporate doesn't shield you from personal liability for unlawful acts. Look at Enron as an example. And incorporating typically does offer personal financial protection sould the corporation go bankrupt or get sued. However, this personal financial protection CAN be prenetrated if you don't act like a corporation. Do you keep your bylaws and articles of incorporation current? Do you hold and keep minutes of annual board of directors? For the small corporation, those things are easy to do. But even then, some things you still aren't shielded from. Try opening a phone account if you are a new corporation. Chances are, the CEO or other designated officer will have to take personal responsibility.

And as far as a regular corporation or sub-chapter S, the key difference is a corporation pays income taxes just like you. You as the owner, do not pay income tax on corporate profits unless it's money you paid yourself. In a Sub-S, the corporation does'nt pay any income tax, the owners do, even if the money never left the business.

[glee.94356]

I suggest you read up on incorporation and LLCs or professional LLCs. NOLO has published several good books on these issues and they are on the web. At least you'll get a general idea.
Getting incorporated does not mean you don't need liability insurance. In the end, it's how much risks you are willing to take on and how confident you are with your skills.
Get a decent insurance broker. Somebody who knows the AEC field and not your local insurance guy who sold you your car insurance and just wants to sell you whatever their big firm is trying to push as professional liability insurance. Check out CNA or any of the firms that provide seminars with the AIA.
The same applies to lawyers. Get one who knows and understands the AEC field. They can look over your contracts and help make sure you don't step in the wrong stuff. Actually your insurance broker can help you review your contracts too. Or contracts from a public entity because a lot of them insists on writting their own contracts which protect them but expose the professional to tons of liability or risks.
Know what you are getting into before you take that step. But congratulations on your decision to go it your own. Good luck.

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Gerard Lee Architects
http://www.gleearchitects.com