You and Your BusinessJun 27th, 2014 | By Editorial Staff | Category: Jack Schrock's Blog
A good friend of mine went into the T & R business 40 years ago and I suggested that he consider incorporation. He decided against it and is no worse for wear, at least not up to this point, though he’s had to dig into his back pocket to bail himself out of trouble now and then. Another friend who had been in the business for over 50 years was recently sued for a huge amount and was shocked to learn that all his personal assets were at risk. He had never incorporated.
Guys and gals, I am not attempting to practice law here. I’m simply suggesting that you recognize that your business and your personal affairs should be separated.
Perhaps you will never suffer a loss, law suit, divorce, death of a partner, etc., and that’s great. So why pay to maintain a separate corporation? T & R is a risky business and every day you are at risk for the actions of your employees, even for the very consequences of being in business. Do you want to lay off that risk to another party while protecting your personal property, your home, savings, etc?
I’m not suggesting that every small business should incorporate. Indeed, if you have no plans to ever grow beyond your starting point and choose to operate out of your home forever, perhaps incorporation may not be for you. But that’s how my other friend started some 50 years ago. Today he has multiple terminals, a fleet of wreckers from small to large and over 30 employees. He has grown his business but never separated it from his personal affairs so one is not insulated from the other … and he stood to lose everything.
Aside from this your CPA might find some tax advantages through incorporation, which makes it even more attractive.
I am suggesting that everybody should look into the matter to the point that they can make an informed decision rather than letting circumstances alone control their future. This is what I often call “putting some business in your business.”