Re: financial impact of incorporating

[Andrew Plato <intrepid_es -at- YAHOO -dot- COM>]

Incorporation prices vary from state to state.  To incorporate you can
expect the following expenses.  I incorporated my company in Oregon
which, conveniently, is a very easy and cheap place to incorporate
(and is where I live!).

1. Incorporation fee (Oregon: $50)
2. Register name to do business (Oregon: $15)
3: City licenses $25 - ??? (Beaverton, OR: $25/employee), based on the
number of employees.  Generally, you only need this for the city where
you're based.  But larger companies may require you to also have a
license where they are located as well.
4. County license.  Some counties require to license as well.  Most do
not.
5. Register business in other states ($15 - ???; California $250,
Washington $150, Texas $100, Arizona $250). If you do business with
clients in other states, you have to register in each of those states
where they are located.  This is not the same as incorporating.
Obviously, if you only work in one place - register in that state only.

<<I am not 100% on all those amounts, but that should give you a
ballpark.>>

You DO NOT need an accountant or a lawyer to incorporate.  In fact, I
would not even recommend it.  It is a waste of money for a small
company. Eventually, if you make a decent profit, you might want to
consider an accountant merely for the peace of mind.

Go to Barnes and Nobel and buy an Incorporation for Dummies book.
Also, there is a line of books called "Running a Company in <Your
State Name>"  They make them for all the states.  When I started I
bought one of these and it was really helpful.  All the things you
would pay $250 to $500 to a lawyer to do - you can do yourself for
free. These books usually give you fill-in-the-blanks  forms that you
can photocopy and write in the appropriate answers.  Some also provide
a diskette with text files for all of the forms.  Really easy stuff.

Incorporation is very easy if you are willing to do your homework and
follow the directions. Just hop on the web and go to the corporation
commission for your state.  Most of the states I have dealt with are
more than happy to help you get all the paperwork filled out
correctly.

Lastly, I really would not suggest forming an Limited Liability
Company.  SOME corporations as well as the Feds look down upon LLCs.
They are considered low-rent corporations by many.  Moreover, the feds
watch them closer and audit LLCs more often.

Also, to emphasize what Eric said - you will need liability insurance.
 Most states require a minimum amount (Oregon: $1,000,000).  I got
$2,000,000 in coverage for $550 a year. Larger companies may require
$2,000,000 as well as health coverage.

Lastly, I too am not a lawyer, accountant, or a good cook.  This is
merely MY PERSONAL experience.

Good luck

Andrew Plato
President / Principal Consultant
Anitian Consulting, Inc.
www.anitian.com

---Keith Bennett <bennettk -at- EROLS -dot- COM> wrote:
>
> Many thanks to all those who responded to my first question about
> incorporating. Your feedback tells me that incorporating is becoming
more
> common than I had thought.
>
> Hope you will bear with me as I ask one follow-up question: how much
(if
> any) do your costs increase once you incorporate? Does the same
apply if
> you go with the S corporation? Now that I know the client insists I
> incorporate, I am wondering whether I should increase my bid on the
> contract so I net my usual hourly rate.
>
> Thank you in advance for any advice.
>
> Keith
>
>
>
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