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Project-Question: Sole Proprietor vs Incorp. Urgent!
ID: 1121437692

Status: Open Urgent!
Created: 7/15/2005 7:28
Delivery Date: 7/30/2005 7:28 (expired)
Project-Question Creator: fitnessmentor
Rating: (No Feedback Yet)
I am going to start a publishing company. However, it could be 2 years or more before the first book is ready for market. In reading the pros/cons of both Sole Prop. and Incorp., I'm still confused on which to do. If it is likely that I'm to show a loss, it seems like SP is the way to go for tax purposes. However, the limited liability of the corp. is appealing (especially if I accidentally infringe on a trademark or something unforseen like that). Furthermore, I was told that with a corp., once I'm showing a profit, I could distribute some of the monies as dividendes which are not subject to FICA/Medicare as long as I'm also distributing a reasonable salary. This is appealing, although it is also appealing to be able to show my losses on my personal taxes rather than the corp. holding them. Is there anything wrong with just starting as a SP and once revenue starts coming in, then formally set up the corporation? I want this resolved ASAP as I need to start documenting expenditures that I've held off on. Any advice would be much appreciated.
  • Entrepreneurship
  • Start-up Topics
  • General Small Biz
  • Business Planning

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Messages Posted: 2

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kkemper $ 6 1 day(s) 7/15/2005 19:24
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details of bid? none you are making a complicated situation out of something simple. The org structure is designed for several reasons and, while one is for tax benefits, [corp] you are far away from that. So, my adice is, start up as a sold prop and sell your goods [books], or whatever. when you reach tens of thousands of dollars in profit, switch over to corp. focus on the purpose of the biz and let the tax situation come when you have net profits to pay TAXES ON!!

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