When to incorporate?
When to incorporate?
(OP)
I am looking at starting my own civil design firm, but I am still about 1.5 to 2 years away (saving money and waiting for the development market to correct some). However, in the meantime I would like to get some of the start up issues out of the way, such as talking to an accountant and lawyer about incorporating and taxes (this forum is cheaper, though).
My question is: when should I incorporate? I would like to have the company set up so I can hit the ground running on Day 1, but on the same token I do not want to run into any tax burdens of having the company but not actually starting work yet (idling). I have the time now to get much of this out of the way, but is there any detriment to incorporating now or 1 year before start or 6-months before start?
I have tried to research this question on the internet, but couldn't find the exact answer.
My question is: when should I incorporate? I would like to have the company set up so I can hit the ground running on Day 1, but on the same token I do not want to run into any tax burdens of having the company but not actually starting work yet (idling). I have the time now to get much of this out of the way, but is there any detriment to incorporating now or 1 year before start or 6-months before start?
I have tried to research this question on the internet, but couldn't find the exact answer.





RE: When to incorporate?
You really need to talk to a lawyer(a good one about businesses) and accountant (good one - again)
Depending on what you do, what state, etc., etc., they can guide you. You might explore an LLC.
Since we are so tied to what we do (personally responsible) -- some say it does not really matter whether you incorporate or just use a sole
proprietership....
But do get insurance!! Good Luck!!
RE: When to incorporate?
As MiketheEngineer pointed out, it will depend mostly on what your objectives are. Everything is a trade off including corporate structures. You should engage an attorney or a certified CPA and di8scuss your situation in termns of tax and tort liability issues, cost of maintaining the company, protection of intellectual property, size and complexity of the company, regulatory requirements from local, state or federal government that are applicable to your particular business activity.
The basic choices you will have are:
1. C-Corp
2. Limited Partnerships and Partnerships
3. Sole Proprietorships
4. S-Corporation
5. Limited Liability Companies
Taxes, available benefits, & liability protection are the 3 biggest factors to most business owners. There are trade-offs within each of the types of entities.
As mentioned above, LLC's are a very popluar choice. Don't forget to catpure all of your start up costs for taxes.
Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website: www.oil-gas-consulting.com
RE: When to incorporate?
A friend of mine did an LLC since he wanted simplicity. I did s-corp. to provide better liability separation and reduce the amount of social security expenses.
Don Phillips
http://worthingtonengineering.com
RE: When to incorporate?
My biggest concern is setting it up too early though. If I am still about a yar and a half away should I even be thinking about this now or should I wait until about 6 months or so before I start business?
RE: When to incorporate?
Don Phillips
http://worthingtonengineering.com
RE: When to incorporate?
good luck !
RE: When to incorporate?
Right now I plan on keeping my daytime job while having the corporation. I do not plan on doing any work, but at least have it set up so when I am ready to go out on my own I can start right away.
RE: When to incorporate?
I'd incorporate now, you will be glad to say later that you've been established since X years in your presentations.