OT contracting and incorporation

keith kmastin-bJEeYj9oJeDQT0dZR+AlfA at public.gmane.org
Thu Sep 27 17:58:56 UTC 2007


On Tue, 2007-25-09 at 16:41 -0400, Neil Watson wrote:
> Hi folks,
> 
> I have a question to direct to the self employed members of the group.
> Are you incorporated?  As an IT contractor are there reasons to
> incorporate or not to incorporate?

It depends on your target clientele and your business model.

I would say that generally, if you plan on doing business with larger
corporations any time in the near future, incorporation is the way to
go. OTOH, if you start out small with a limited partnership or sole
proprietorship, it's not going to be difficult to upgrade to an
incorporation if the need arises.

Incorporation adds an air of stability that's attractive to some
clients. Spending the time and effort to incorporate lends credence to
the fact that you plan on being in business for a while, and generally
presents the opportunity for growth. It's also pretty easy to sell a
successful incorporation (easy as in finding a buyer, not going through
the rigamarole of actually going through the sale).

Incorporations can carry a significant start-up cost. Laywers,
accountants etc., are not offering services for free (1/2 hour free
consult is a sales pitch IMHO). Creating a business plan takes a lot of
time and effort that might be better spent on advertising and marketing,
esp. in the early stages where you might get the feeling that you put
your head on the block and you can imagine the "whoosh" as the imaginary
axe is about to put your best laid plans to and end.

If you have a bit of investment capital, do the math to see if the
business can survive with zero income revenue for about six months (be
sure to include all the hidden costs). Otherwise, I would wait to
incorporate until either the capital or the need arises.

That's just my experience.

I'm gonna duck out and upgrade my flame-retardant suit to the latest
version now.

HTH
Keith

--
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





More information about the Legacy mailing list