This Blog is directed to individuals carrying on business as sole proprietorships, though I won’t tell if you’re reading this and you don’t fall into that category.
I have heard many explanations over the years for not incorporating:
1. I am not sure the business will be a success;
2. I don’t have the money;
3. I don’t need to, you’re just trying to make money off me because you’re an evil lawyer. (the evil may be my addition, but I’m sure it was implied).
I’ve heard more than the above, but most of the explanations fall into one of those three categories.
So, let’s talk about these explanations. A non-successful business likely will incur debts. If you are not incorporated, those debts will be personal liabilities. So, if you stop paying that copier lease, rest assured you will be sued on the balance owing on the lease and that job you got after you closed your business doors? Well that salary is now being garnished at the rate of 20% of your net wages until that Judgment is paid.
Sound like a good idea? Of course not.
Moving onto money. Starting a business takes money. Many firms, including ours, will incorporate you on a flat fee basis. Many of those firms will also negotiate reasonable payment terms with you so that you’re able to pay for the incorporation over a period of time.
Finally, the evil lawyer argument. There are evil lawyers out there I’m sure, however, our firm is not made up of them. We’re here to protect you and everything you have earned from your hard work.
A corporation protects your personal assets from seizure by creditors.
A corporation protects your personal assets from a wrongful dismissal lawsuit by a former employee.
A corporation allows you to split your income between shareholders, which puts more money in your pocket.
There are many other reasons to incorporate, but the above are the key ones.
If you’d like to learn more about how we can help your business, please feel free to call or email one of our lawyers.