Q and A


Question:

I am interested in starting a home-based business providing executive search services for Technology Professionals.  I currently have a business which is a (dba).  Since my business is home-based with minimal overhead, is it best to remain a dba or to Inc?  In the event I remain a dba, what steps do I need to take to protect me from legal issues?

Answer:
This is a great question for your lawyer or accountant. Their are numerous legal and financial reasons associated with a change of business registration and the specifics can’t properly be covered in this forum.

A sole-proprietorship, also known as a DBA, is the most basic type of business to create. It doesn’t take much, usually just a county issued business license and a checking account with a local bank. The problem with setting your business up as a sole-proprietorship is that the business is directly tied to you and you’re responsible for its debts and or legal problems.

A corporation has its advantages. It’s also more complicated to manage and it will cost you some money to establish properly. Basic incorporation services from a lawyer will start at about two thousand dollars. A corporation is a legal entity and it will get sued, not you, should you run into legal difficulties. Incorporating a business can offer some piece-of-mind and you should probably consider it. There are also some tax advantages to setting up your business as a corporation. Keep in mind that filing your taxes at the end of the year will become a great deal more complicated if you incorporate.

Talk to a lawyer. You don’t want to do this on your own. A lawyer may suggest that you remain a sole-proprietorship. His recommendation will be based on what type of business you’re running. If you’re cutting neighborhood lawns or consulting in your local community, he’ll probably recommend you save yourself the trouble and leave your business as is.

I hope this information helps.

Thank you,

Cale Bruckner

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Cale Bruckner
Cale Bruckner

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