TR Forums

Hi All,

I and some friends run a small family run home business where we sell faith based craft kits. Been doing this for a good 10 years with them. It was sort of a hobby between us, but the hobby has ballooned into a business with over $160,000 per year in sales now.

We need to incorporate for tax and liability reasons and I was hoping someone else on these forums may have had the pleasure of incorporating a home business and have some resources they might recommend. I would love a reputable accounting Q&A online that I could bounce questions off.

If anyone has a good idea of a place to go, I would appreciate it. I don't want to hire on an accountant just now, if I can help it... If I cannot, I will, but thought I would see what I could accomplish on my own on the cheap for a start. When I finally do break down and get an accountant to help me, I want to be down to the really hard questions.

Thanks!

Elohim wrote:

We need to incorporate for tax and liability reasons and I was hoping someone else on these forums may have had the pleasure of incorporating a home business and have some resources they might recommend. I would love a reputable accounting Q&A online that I could bounce questions off.

The first step would be to determine just what that need actually is, because while that is a generic phrase it isn't actually a generic situation. Particularly in regard to taxes... Without specifics there is no specific answer.

But really this isn't the forum for it anyway, because if you really have 160K a year in sales and growing, this is not the sort of thing you want to do "on the cheap." Screwing it up could not only ruin the business, but those friendships you spoke of.

Speak to a lawyer. It'll be worth it, I promise you.

Depending where you live, an experienced business lawyer from a small local firm might charge you for 1-2 hours at $200-300/hr to review your basic business strategy and then outline your best options for producing the necessary legal umbrella (probably an LLC or S-Corp, but full incorporation may be necessary in some circumstances). Right now you are operating as a de facto sole proprietorship and are liable up to just about the shirt on your back -- keep that in mind when deciding whether it's "worth" spending a little extra money to set up your new liability shield correctly.

What you need is not generic advice, but very specific advice tailored to the type of business and the legal jurisdictions under which your business is governed (state/county/town/etc.). It also helps to have a comfortable legal relationship established at the outset of formalizing your business so that if/when you get sued or audited, you don't have to start blind-dialing the local listings.

You could check here:
http://arstechnica.com/civis/viewforum.php?f=25

Second the opinion that you should talk to a lawyer.

I've been reading about lawyer referral start-ups recently. A commonly mentioned site is upcounsel.com. You might check out these types of sites, though I haven't used them and have no idea about the quality of the services performed. In the end, however, you get what you pay for.