Many time when I'm asked fill out a form, like at a doctor's office, I'm asked who my employer is.
I'm often tempted to write in "self employed". But technically, I'm not. I'm an employee. That is, I work for my company, not for myself.
Now, my wife and I happen to be the sole shareholders in this corporation we work for, but the fact is that a corporation is an entity unto itself. We also happen to be employees of the corporation too. While my title is President, I wear other hats too, that of publisher, editor, writer, human resources, marketing, IT manager, even janitor.
But it's important to understand that when you incorporate your home-based business, you're creating a separate entity. It's no longer your business, it's the corporation's business. You're now an employee, though you're also the shareholder too.
In this regards, the corporation protects your personal life by creating veil between you and the business. Any issues that arise relating to the business stays with the business and doesn't reach into your personal life. Whereas with a sole proprietorship, all issues that arise with business have full access into your personal life, because your business and you are one-and-the-same.
When your business gets big, and you begin hiring employees and contractors, it's a good idea to incorporate simply to create the "corporate veil" to keep your personal life protected from your business life.
I'm often tempted to write in "self employed". But technically, I'm not. I'm an employee. That is, I work for my company, not for myself.
Now, my wife and I happen to be the sole shareholders in this corporation we work for, but the fact is that a corporation is an entity unto itself. We also happen to be employees of the corporation too. While my title is President, I wear other hats too, that of publisher, editor, writer, human resources, marketing, IT manager, even janitor.
But it's important to understand that when you incorporate your home-based business, you're creating a separate entity. It's no longer your business, it's the corporation's business. You're now an employee, though you're also the shareholder too.
In this regards, the corporation protects your personal life by creating veil between you and the business. Any issues that arise relating to the business stays with the business and doesn't reach into your personal life. Whereas with a sole proprietorship, all issues that arise with business have full access into your personal life, because your business and you are one-and-the-same.
When your business gets big, and you begin hiring employees and contractors, it's a good idea to incorporate simply to create the "corporate veil" to keep your personal life protected from your business life.
0 comments:
Post a Comment
Note: Only a member of this blog may post a comment.