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Discussion in 'Business Operations' started by Dburd61, Jan 31, 2005.
Can someone please tell me what are the advantages and disadvantages of being incorporated ?
Some of the top reasons that I did it:
Makes you look more professional
Good and Bad as the reasons from this young man:
Correct, being incorporated "could" and should protect personal assets in the event of a law suit. However if the owner of the INC is the owner of the personal assets and no one else is listed in the INC some lawyers still will go after those assets and argue they are the same.
Actually being incorporated you pay more taxes because you have to then pay Corp taxes as a business also. You can remain a Sole Prop and still have employees with a payroll and the same deductions any business owner would have and not have to pay those corp taxes and only be taxed on the year end profit as an indiv. The same may also apply if you file as a LLC depending on how you set it up.
Same as Liabilty
Not a good reason by itself at all to INC. and really a very poor reason to do it as being an INC will cost you quite a bit of additional money evry single in additional taxes brought on by the INC itself. Plus few folks will even know or care. In most of our advertising it doesn't even have our company status as LLC mentioned.
BUT, if you are large enough, making enough real money and have employees and a lot of personal unincumber assets to protect then yes you may want to look into incorporation. Do a search on here as there are lots of threads on this subject already posted. Good luck.
Only true in a C corp not an S corp. If you make substantially more than $35,000 to $40,000 per year as an sole prop, then incorporating "could" be worth pursuing because of the self emp tax savings on money beyond this salary.
So what you are saying is that being a Corp. does not make a business look more professional? Well sir I strongly disagree! In the cut throat Industry that we are in (especially in my area) there are some things that you can do to set your self apart from Billy Bob & Chico's Lawn Care. Here is a list of some of them:
1. Provide High Quality Workmanship (take pride in what you do)
2. Devise Company Standards and adhere to them
3. Have the proper Insurance & Licensing
4. Don't advertise for cheap lawncare services
5. Portray a positive, professional image. (Inc.)
6. Have as many professional affiliations as possible
7. Be able to provide a multitude of services
All of these little things combined set my company apart from SO many of the Billy Bob & Chico companies that pop up every year.
Paying a little extra in taxes should not discourage anyone from doing what they feel is necessary to succeed in this industry. I personally feel that having that little INC. after my business name shows people that I am a business person and that I take pride in my company. I also believe that your work speaks for itself. So many clients have complimented me on "How professional I am" and how well I represent my business.
This is just my opinion.
Here is a post that will offer you more insight.
llc or sole proprietorship
What I said was is that that reason alone is not enough to justify incorporating.
You well should take pride in your company as I hope we all do but they are basing "professional" you are on how you present yourself and on your WORK as they well should not that you have INC behind you name I assure you.
As I said I have been an LLC for years but in our advertising for new clients rarely is that even shown as I know that in the end it really has very little at all to do with getting business.
Well I feel the complete opposite is true for me.
People look for professionals. Your name has a big influence on how people percieve you. Having the INC. after Cutting Edge Landscaping is a sign of a professional business (Corporation). People in general might not care, but I think that it is safe to assume when someone looks at two different business cards and see's that one company is a Corporation (INC.) that it is going to strike them as more professional looking than the company that is not.
Just a guess.
I think your wrong about the inc part. Take (Inc.) out of your post and you still have a damn good formula.
Say you drive dirty old trucks, haven't shaved for a couple of days, don't have uniforms, but have Inc after your name.
I have newer trucks, clean shaven, uniforms for my employees/ dress the part my self, but have no Inc after my name.
Who looks more professional??
Having Inc after you name doesn't do **** for you image wise. If you took the money it would cost you to become incorporated and spent it on some direct mail flyers or some other type of advertising (maybe uniforms or signage for you truck/ trailer) I guarantee they will land you more new clients than being incorporated. There are many good reasons to do it but improving your image is not one of them.
So to each his own.
I have uniforms and clean trucks as well. I am not going to argue this point anymore. I know what works for me in my market and I can assure you that all of the above have helped me pick up new clients. I was not saying that I did it to improve my image alone. There were a multitude of factors involved in my decision to go Incorporated. Maybe it does not get me clients per say, but it does help portray a professional image. Regardless of what people say I know this to be fact. Other things that help are quality workmanship, uniforms, clean equipment, professional letterhead, A well designed logo, and anything else that keeps your name in the customers mind. Keeping things uniform in appearance such as business cards, truck lettering, flyer's, shirts all help the customer or potential customer remember you/ your name.
People in my area know Cutting Edge Landscaping, Inc. They know that I am a professional and that I provide very high quality work.