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Author: pfbrennan Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121317  
Subject: To incorporate or not Date: 11/10/1999 6:43 PM
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What are the advantages and disadvantages of starting a corportation as regards to taxes, investments, and liability by the owner? Can anyone recommend where to incorporate? Nevada? Delaware? Is there one good book that explains this in lay terms? Thanks.

Patrick
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Author: hghcpa Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20874 of 121317
Subject: Re: To incorporate or not Date: 11/10/1999 7:06 PM
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What are the advantages and disadvantages of starting a corportation as regards to taxes, investments, and liability by the owner? Can anyone recommend where to incorporate? Nevada? Delaware? Is there one good book that explains this in lay terms? Thanks.

=======

This is a difficult question to answer and each particular situation must be examined on its own merits.

First of all - if you are talking about incorporating your "investments" only and there is no real profit seeking business other than that involved then your idea will stink.

Personal holding company rules will zapp you tax wise.

Now if you are self employed that is an entirely different situation.

IMHO - there is no real reason to do business this day in time without the semblance of a corporate veil around you. To many bad things can happen that in many instances an incorporated business would help alleviate.

There are many qualifications to that statement of course and I will likely get some vocal response to same from the other gurus on this board but....

if you can jump the following hurdles...


1 - you must keep good records - double entry bookkeeping, etc

2 - You must keep good corporate records, minutes, bylaws updated, etc etc etc

3 - You must be willing to draw a reasonble salary from the corporation - needs to be "regular" monthly salary comensurate with what your services are worth.

4 - You must be willing to pay a professional to assist you with tax returns and business planning.
(i know i will hear from this one)


Lastly - you need to seek some professional advice from someone who can analyze your own unique situation if you are in fact self employed and considering this change in your business structure before you make the jump.






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Author: mphipps Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20908 of 121317
Subject: Re: To incorporate or not Date: 11/10/1999 10:51 PM
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*******What are the advantages and disadvantages of starting a corportation as regards to taxes, investments, and liability by the owner? ******
Here is what I think I know.
1. Advantage. YOu can take the maximum salary for Social Security benefits arounD 25000. And take the other in Dividends and not have to pay 15% social security tax.
2. Advantage. If you got into financial or other problems you could desolve the corportation tomorrow and start another one.
3. You could add you family to the payroll and do the dame as 1. above and generate more revenue.
3. YOu protect your personnel assets from certain legal actions or
4. YOu place your personnel assets in the corporation and protect them from estate taxes.
Disadvantage.
Cost alot to incorporate and keep the records. Other options are K-Corp or limited Liability Comp.


Can anyone recommend where to incorporate?

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Author: spudman One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21010 of 121317
Subject: Re: To incorporate or not Date: 11/11/1999 10:35 PM
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"3 - You must be willing to draw a reasonble salary from the corporation - needs to be
"regular" monthly salary comensurate with what your services are worth."

Unfamiliar with this. What are the guidelines and what are the consequences of not drawing a salary? To my knowledge, my CPAs have not raised this issue in my 15 years of incorporation.

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Author: elibortPrairiela One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 21030 of 121317
Subject: Re: To incorporate or not Date: 11/12/1999 8:23 AM
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I hope the wide variety of answers you've gotten so far will encourage you to focus on the one theme that runs through almost all of them ---- get professional advice from someone who will take the time to understand your situation and your real objectives.

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