When running a business, things can quickly get hectic and it can be hard to see the reason for doing things. The advantages of incorporating in California is one such topic.
Incorporating is too expensive. It takes to much time. I don’t have time to figure it out. Payroll? What do you mean I have to run payroll? All of these are reasons given for not incorporating and each has its merit to one extent or another. That being said, there is one other statistic you need to keep in mind.
There are over 100,000 lawyers living in California. More and more of my brethren and sisters are being pumped out of law schools up and down the coast each and every day. These people need work. I’m not going to hire them! The “easiest” are to get started in as a lawyers is to plaintiffs’ work. This essentially means suing someone for something.
As a business owner, this should make you not only mad, but cautious. With this many lawyers running around, what are the chances of you being sued? Unfortunately, they are not good. It may be a customer you have a dispute with. It may be a vendor you do business with. It may be one of your own employees claiming unsafe working conditions or wrongful termination or something else. The point I am trying to make is that you are at risk!
The single biggest advantage to incorporating your business is also the one that will let you sleep at night. Incorporating protects your personal assets. If someone sues your business and wins a judgment, what happens? They can recover from whatever insurance you have on the business and any assets in your business.
What can they not take? They cannot go after you house. They cannot go after your retirement fund. They cannot go after the money you have been saving to put your kids through school. They cannot go after your cars. In short, the only thing you have at risk is the time and money you put into the business. Admittedly, that is a lot, but it beats putting your entire personal life at risk!
You may find it odd to find a lawyer writing an article like this. Well, I’m not like most lawyers as you’ve probably noticed if you read the home page or about us page of this site. Regardless of how you feel about us in the legal profession, you need to act on the practical problem facing you and your business. I’ll incorporate your business or you can find someone else to do it – just do it!