OT contracting and incorporation

[phiscock-g851W1bGYuGnS0EtXVNi6w at public.gmane.org]

> It protects you from creditors to some extent. The business can go
> bankrupt without you personally being on the hook to the company's
> creditors. Again, governments are immune from this -- if a failed
> company owes taxes they will come after the directors personally if the
> company's assests aren't enough. In particular, collecting taxes and not
> remitting (ie, sales tax or employee deductions) is a real no-no.
>
It should be mentioned that a sole proprietorship is much simpler
financially than an incorporated company. A corporation is a separate
entity so it must file its own tax return. The return is short but the
guide is 120 pages long! Some people do their own corporate return but in
general you'll need an accountant and that's an additional expense.

Insofar as borrowing money is concerned, the banks will require you to
provide a personal guarantee of any financing so you're still on the hook
if the company fails.

I've operate both a sole proprietorship and a corporation. A sole
proprietorship is much simpler, though there may be compelling reasons to
incorporate. Incidentally, the Self Counsel series of books has one on
incorporating a business.

Peter

-- 
Peter Hiscocks
Syscomp Electronic Design Limited, Toronto
http://www.syscompdesign.com
USB Oscilloscope and Waveform Generator
647-839-0325

--
The Toronto Linux Users Group.      Meetings: http://gtalug.org/
TLUG requests: Linux topics, No HTML, wrap text below 80 columns
How to UNSUBSCRIBE: http://gtalug.org/wiki/Mailing_lists