[PLUG] OT, sorta..: consulting question

Mike Witt mike at computer-arts.net
Fri Aug 23 21:05:21 UTC 2002


Rich Shepard wrote:
> 
> On 22 Aug 2002, Dylan Reinhardt wrote:
> 
> > Ditto to registering a name, but don't underestimate the importance (or
> > ease) of incorporation.  It's not a crucial first step, but don't let
> > yourself get more than a year or two into being a consultant without
> > doing it.  Sole proprietorship is a losing proposition, long term. (IMO,
> > YMMV, etc.)
> 
>   Being incorporated 1) implies stability and longevity and 2) gives the
> impression of a larger company. A sub-chapter 'S' corporation is ideal for a
> single individual.

Just curious if you guys have had specific experiences where you
lost work (or whatever) because of not being incorporated. I almost
incorporated (as opposed to sole proprietorship) a couple of years
ago. My accountant advised against it at that time just because it
made it a little bit harder to move money back and forth between
me and the business (and he didn't see any advantage.)

I planned to incorporate the first time I actually *lost* a contract
because of being a sole proprietorship. Even though a number of people
have told me they wouldn't hire me if I wasn't incorporated, every
time (so far :-) this has turned out to be *wrong* and the contract
went through.  The issue generally turned out to be EAO and Liability
insurance, which I have (1M), and of course a separate Federal Tax
ID for the business.

Since business is pretty bad right now, I'm kind of curious whether
or not there is something to this, and just looking for more info.

-Mike



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