New to O/O

I'm not so sure you know what you're talking about, to be quite honest.

 

enron ceo and Bernie committed fraud reason why they are in jail.

even if you do a personal guarantee on a loan it can be quickly dismissed if business goes under and you file for bankruptcy.

in other words corporations protect the owner from law suits not from criminal behavior.

 

Yeah, you're probably right. Thanks for your honesty too eh.

 

More excellent advice on how to use bankruptcy protection, thank you for that.

Seriously, I am certain you know a lot more than me about the routes out of or through failure. But I've been self employed since I was 18 and I'm 62 now, not made a great success of everything I've done but never been near bankruptcy. But I've learnt plenty about taxation and liability.

 

I congratulate you on a long career in self enrichment. Although I don’t have that many years under my belt I would say I have been working for my self since I was 9 years old, I remember the first thing I sold was a free Marine Corp poster that my brother got when he was in Jr High, I took it to school with me and sold it to a kid for $2 bucks. Then I went on to sell other things such as pocket knives, teachers signatures, fake drivers permits to take you drivers license tests without going to school. Hey I even sold protection in the 5th grade and I got arrested for that one and the Cops where trying to scare me straight with the RICO act.


In all these years I have learned to always pay my debts and honor my word. Now when I lost money in the stock market no one said “hey let’s pay this guy back” because I knew it was an investment. When a bank loans a company it’s an investment and they want a certain % for their loan on top of the principle. In other words if business goes under I don’t care how much you cut and slice and do all sorts of math, if you can’t pay the loan you can’t pay it.

see the great thing about this country and what makes it great is you can fail as many times as you want but it only takes 1 success to whips out the 100 failures.
In other words if there was no bankruptcy laws protecting people from banks and creditors people wouldn’t Take the risk of starting a business. How many rich people are there that have failed many times before making it rich again. In other words system is designed perfectly and designed for the man or women who aims for the moon and then tried his best.

 

Theres some very good points there that I've not looked at the same way but will think about.

Only thing I would correct is self enrichment, honestly my whole life has been self indulgent. Liked motorbikes a lot so gave up my safe insurance broker job to be a motorcycle messenger when I was 18 and it's gone on in many odd directions from there but always to do something I wanted at the time.

I've never liked paying taxes, not a moral thing or anything like that just dont like them but I know I'd hate prison food or hunting the soap games so I've tried to be legal whilst carefully working the system to my best advantage and a lot of the time incorporating was going to be detrimental to my tax situation. And then sometimes it was the best thing to do, theres no one size fits all.

I've never planned anything I've done with failure in mind as I'm not much of a gambler, just someone who doesn't like to be managed or have a boss and just wants to get along.

 

This is inline with what my accountant told me minus the talk about fraud.
If you are a 1 truck show with you doing the driving being incorporated is pointless unless your net income is above, I think it was $150,000. I don't remember for sure so ask your accountant.
He also told me that he has some o/o clients that are incorporated and don't need to be just because it makes them feel protected although it is a false sense of security.
Best advice is talk to your accountant and lawyer to find out what is best for your situation.

 

My fraud analogy was not very good really; what I meant was it's my opinion Bernie and the Enron lads were carried away by the high priced advice they were getting on what they could get away with and their magic coat of limited corporate liability coupled with a hugely talented and expensive legal legal team meant the very idea of prison time was never even a possibility. They were just carried by the developing misguided situation until the cell door slammed shut, they didnt start out as criminals but that's where greed took them.

I'm not suggesting any aspiring one man band with a truck has any similarities with that type other than the maybe over reliance on the incorporated magic bullet, and that's not likely to end up as them being mr bigs new lady dog but there are always consequences .

 

Oh, but he does.

Especially as a start-up, the corporation directors are going to sign personal guarantees anyhow, so protection from bankruptcy is very limited. Protection from fraud is non-existent. Aside from any tax advantages (consult your qualified adviser), there will be protection from liability to the extent that any such liability is attached to the corporation only and not as a result of negligence, malfeasance or other inappropriate actions on the part of the owner/operator/director. Once the corporation financials get strong enough, then the director(s) can likely extricate themselves from that liability.

 

Thanks! Like I said, its not a get out of jail free card, incorporation provides OPTIONS. As mentioned, with the right lawyers/accountants, its a much better way to do business than Sole-Proprietor. I've been LTD since 2004, and it has given me a ton of flexibility. Not to mention, business credit. Anyhoo, that's my advice, best $800bux I ever spent (Named Ltd Company, setup by a lawfirm).

Cheers