Individuals often tell us that they have been told by their legal or tax advisor that they are too small to incorporate. After talking with these individuals further we discover that the answer of “You’re too small” is really just a way for the advisor to discourage further conversation and discussion because the advisor has no education, experience, knowledge and/or clear understanding of incorporating.
A lot of Business owners, for some reason, believe that every legal and tax advisor has knowledge of every single area of law and taxes. Which is simply incorrect; it’s kind of like saying that a chiropractor could prescribe you medication for a bacterial infection. He’s a doctor, right? All legal and tax advisors specialize in specific areas of practice, so not every legal advisor will be able to give qualified advise about incorporating, as it is a specific area of law. The majority of tax advisors specialize in personal 1040 tax preparation; that does not qualify them to advise you on corporate or LLC taxes.
One of the main reasons why an advisor might say to you “You’re too small” is because stating the truth is like saying, “I will lose the money I am making off your business because I am not qualified or capable to handle your business, if you choose to incorporate.” By stating the truth your advisor would be making your business a priority over their business’s financial benefit and they are not going to do that. Professional advisors do not like admitting lack of experience or knowledge, so they will say what they need to in order to keep your business and feel superior. In addition, most legal advisors do not grasp the tax benefits of incorporating and most tax advisors do not grasp the liability benefits of incorporating. Neither cares about the benefits of the other side, because it isn’t their area of specialization, but you should care as both taxes and liabilities affect you and your business.
The choice to incorporate is yours; the choice is not your legal advisor’s or tax advisors. You should know that there is no such thing as a specific dollar amount in your bank account that triggers the need to incorporate. There isn’t a specific amount of liability that requires you to be incorporated and there is no such thing as too small to incorporate. You should also know that there are benefits to incorporating that you may not receive due to the industry your business operates in. You should be advised to the upkeep needed to ensure the integrity of the incorporated entity. You should understand the risks involved if the incorporated entity is mismanaged. You have the right to be able to make an informed decision. You may just have to replace your current tax and/or legal advisor, and it is ok to do so.
We don’t believe in providing curious business owners information about incorporating that is self-serving. We don’t believe in bulling business owners to do business with us. We don’t offer “have-to-do-it-now” specials or “first-time caller” discounts. You’ll never have to file a restraining order against us because we don’t specialize in stalking. We do specialize in incorporating, so if you would like to speak with someone, call us today to schedule your consultation.