|
BRIEF BYTES: Question and Answer
Forum
The purpose is to answer frequently
asked or unusual questions. Topics will range from real estate,
business, litigation and trusts and estates. Your feedback
is appreciated. Direct your comments to Cherisse Roy at croy@scott-harris.com
Question: Should a real estate agent incorporate?
Response from Rick Barra:
 Business
owners typically incorporate for two main reasons- to avoid
individual liability for debts and obligations of the business
and to provide a simple means for transferring ownership interests
in the business. Incorporation may protect your personal assets
from claims of creditors of the business. Additionally, incorporation
allows you to sell or transfer ownership interests via the
conveyance of stock.
Incorporating
a business also creates additional accounting expenses and
other obligations. An annual report must be filed with the
Department of State; annual filing fees must be paid; tax
returns must be filed and meetings of the shareholders and
directors should be held periodically.
You
should review your personal objectives to determine if the
benefits of incorporation outweigh the additional expense
and requirements. For example, do you face potential individual
liability which could be avoided through incorporation? Do
you sign contracts or leases? Could you face liability to
third parties for personal injury for use of a “company”
car? Will the ability to convey an interest in the business
to another party benefit you or do you simply work as a “one
person” shop?
If
you decide to incorporate you should discuss the tax consequences
with your tax advisor. Business owners often feel that incorporation
provides tax benefits (such as deduction of business expenses),
which are not otherwise available. Many of these benefits
are available to sole proprietorships without the expense
and additional hassle of incorporation.
To Contact Us, call (561)
624-3900. Or fax
(561) 624-3533. To correspond online, please fill
out our contact form with your comments.
|
