Question:
Opie need some more advise. Starting new business here in about 35 days.With the way Lawyers are suing everybody and their mothers.I need to know how to protect my house and other assets.Do I put all non caring items into my wifes name, will that protect us.I am the owner and the operator of the car.Would it be best to incorporate,form a LLC,or do a sole proprietor,or a S-corporation.Which way provides the best protection.
In case you are wondering I am not leasing on to a company.
Thanks for any help you can pass on. Already have a choice in mind just want to keep all the ducks going to the same pond

Answer:

Go C Corp. You then do not have to put everything in your wifes name. I am not sure about every state, but any item that is "jointly held by you and your wife" is exempt from grabby hands, unless your wife is equally negligent or complicit in the act or occurence. Just make sure that you keep business assets separate from personal and do ALL of the paperwork for the corporation properly. You might look into a Delaware C Corp. But in any event, concult with an attorney in your home state.

Answer:

Personally I would never consider any business without a "C" or "General" Corporation status. My choice for years has been the State of Nevada, Delaware lost its' advantage years ago. The liability is one of the larger issues, taxation another.
I know Russell does not agree with the value of incorporating, but that is his opinion.

Answer:

Incorporation for an O/O who is both owner and driver has no protection properties. If involved in an accident they can be sued as both the corp. and the driver.
If, on the other hand, you are the Owner and hire a driver for the car, only the corporation is liable for a law suit and not you personally.

Answer:

Thanks. There is only three (3) reasons for an Owner Operator that operates his car to incorporate: 1) so lawyers can make more money. 2) so accountants can make more money. AND 3) so you can sit around the car stops and brag about your corporation....
No matter what you call yourself, if you are found at fault or negligent, your CORP, you, the company you are leased to, and possibly the highway and GOD will be sued. Other wise you have insurance to take care of things.
That is the way it is.
russell

Answer:

Russell, thank you very much for saying what I have been saying for many years. It still amazes me that most drivers will believe the voice at the other end of a radio transmission than from someone who knows.

Answer:

Thanks, I didn't know that DE had lost its advantage. I stand corrected. However, I still think that sometimes, depending on alot of tax circumstances, incorporation can be of benefit. It may not be viable for most, and as Russell says, will only make the accountants, lawyers and such rich, however if you have other business interests, or your spouse has other business interests, such as a company that operates, or you have rental properties....it might be prudent to shelter them by making them a separate entity or the car a separate entity.
I know that here in Florida if you are a C Corp, if something does go wrong, the corp can be sued, and in the event of a vehicle accident (subject to limitations established by the "no fault laws") the driver can be sued as well. But......if all assets are jointly held....any judgement renedered is useless as you cannot take anything from an innocent party. Conversely, if you transfer all of your assets into your spouses name and get nailed in court here the judge can and may find that you effected the transfer to "hide" the assets, and in that case you are really screwed.
Frankly, I owned three "C" Corps, and I was not in the habit of making anyone rich, except my insurance man, the phone company, and my manufacturers. I found that there are certain tax advantages that are allowed to "C" Corps that individuals cannot use. For instance: Health insurance costs... If your "C" Corp pays for your health insurance the corp can write off 100% of the cost as it is a benefit provided by the company to you. Currently a Sole Proprietor can only write off a portion of that amount. There are other advantages to a "C" corp, but it is not always protection from lawsuits, especially when you are possibly the only employee.
The downside to "owning and operating" a corp oration is that "YOU MUST BECOME ADEPT AT ACCOUNTING, BOOK KEEPING, AND DOCUMENT PROCESSING"!! Failure to do so will cost large amounts of money and headaches and the IRS will have your butt in a sling. Not to mention your home states Department of Revenue and other departments. One must examine the needs and reasons for incorporation, and should consult with several accountants, and a couple of attorneys to find out a concensus. It may not be the way to go. Any real problem in the event of accident or other problem amy be coverable by increasing insurance coverage.

Answer:

The purpose of a corporation is to create an "artificial person" which can be brought into court, sued, and regulated as if a person. There are downsides, including the fact a corporation must always be represented by an attorney in a court action. You cannot represent a corporation "pro-se".
In most situations the "barrier" created will eliminate personal liability, but not all. In New York City fleets of cabs owned by one person establish separate corporate entities for every cab. In the event of a serious accident the entire fleet is not at risk. Yes, the legal system in the United States is such that your personal exposure is greatly reduced when a legitimate properly formed corporation is created.
You have other reasons besides accidents, however to create a corporation. Let us consider a case of breach of contract which causes material loss to a third party. Or perhaps an environmental spill relating to a fuel tank on your property. There are also numerous tort actions that can result in personal liability. I remember one instance where driving across a wet golf course resulted in a civil suit for $20,000 in damages. That grass is expensive.
There are plusses and minuses. The paperwork is significant, but not insurmountable.
Delaware is an easy state to incorporate in and you can do so yourself for a nominal sum, provided you obtain a representative within the state who provides an address. The State of Delaware had a super-duper packet for this purpose. It is easy to do without an attorney in Delaware. You may also be required to register as a corporation in the state in which your operation is based, depending on the business law.

Answer:

NewYorkNewyork2, Skywalker, We are talking about apples and oranges.
I will repeat again: "if you are found at fault and or negligent" you are going to be sued no matter who owns the corporation. That is what you carry insurance for.
Heck yes the cabs are incorporated...the driver does not own the cabs.
As far as tax breaks in a corporation there are none over a sole-properitor business. There are a lot that get buried with trying to call the income profit instead of wages subject to SS tax...What the IRS will do when they catch you isn't nice.
As far as medical as a sole-properitor Schedule C filer, if you are married you can deduct all your medical expenses.(check the archives in the Tax forum and also RoadStar.
I have written about INTERNAL REVENUE CODE SECTION 105 many times...have any of you experts bothered to look it up?
As for a C-corp most states have a tax plus on C- corps. Even if you are registered in another state most states require you register there too. It is just one of those things that some don't do.
As to record keeping, a corporation of any kind, as well as partnerships are required to KEEP GOOD RECORDS, not a shoe box.
Then what do I know? I have watched the masses run to corporations to only find out that what I said is correct.
The only reason for a Owner Operator that owns and drives the car to incorporate is so the lawyers make more money, the accountants make more money and they have braggin rights in the car stops.
Have at me I am going to pay my monthly bills.
russell

Answer:

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