Do I need to incorporate?

Question

I am starting a clothing manufacturing business and I will be selling to stores and may open up an online web site . Would it be a good idea to incorporate?

Answer 1

It depends upon your choice. weigh the pros and cons of being a sole propreitorship or a corporation. manufacturing business does not necessarily have to be a corporation. But since it has the lowest risk of investor liability among other organizations, businessmen preferred to incorporate. though its low-risk, its also costly compared to proprietorship in terms of government compliance, business registration and other applicable fees.

Answer 2

Yes. There are a number of different types of corporations. A Limited Liability Corporation is the easiest to start and the simplest to maintain. However, since you are manufacturing and selling to retailers as well as consumers, I suggest you incorporate as an "S" Corp (Sole Proprietorship). If you do that you can borrow money and sign contracts as the "S" Corporation CEO.

If anything goes wrong...someone sues you for something real or imagined, or something forces you into bankruptcy, it is the corporation that takes the hit and not you personally.

It's not all that hard to do either. You can normally incorporate on-line and even that won't cost all that much. If you want a good tax at tourney or accountant will set you up for a couple hundred bucks.

Go for it!

Answer 3

Incorporation allows the sale of shares in the company and protects the owners from liability. Are you planning to issue stock or do something that is likely to get you sued?

Answer 4

You need business insurance. Call an independent insurance agent with business clients to get some quotes. Then, talk to a CPA about the tax implications of being an LLC vs. INC. You can also go in the www.irs.gov to get their small business packet. Good luck.

Answer 5

You don't NEED to incorporate, you can be a sole proprietor. But if someone sues you, all your assets (house, car, savings) are at risk. If you incorporate under a "S" or "LLC", it will cost a few hundred dollars (depending on the State), but only the assets of your business will be at risk.

Answer 6

To seem like a real biz to those you deal with, for limited liability protection purposes, and for potential tax savings (after consulting with your tax advisor), probably yes, and probably sooner rather than later.

No one is "planning" to get sued, but the reality is lawsuits (and creditors, if things go south) happen.

You issue stock as part of having a corp., not because you 'want to issue stock.'

Answer 7

yes it would, you should always incorporate your new business.and its not hard just call the i.r.s and they will help you.plus its not that expensive