| p>If you structure your business as a | | | | professionals such as CPAs and attorneys. So you |
| corporation, you gain a certain amount of legal | | | | are paying a stiff price for this form of corporate |
| protection. If the business goes bad at some point | | | | shield. There are alternatives, however, and |
| in the future, the creditors of the business will not | | | | depending on your situation they may work |
| be able to come after you personally. They will | | | | better for you, in terms of personal asset |
| only be able to attack the assets of the | | | | protection, than a traditional corporation. These |
| corporation unless you have given personal | | | | are discussed below. |
| guarantees. | | | | Another possible drawback of a corporation is this: |
| The drawback of such a business structure is the | | | | Since the shareholders control the corporation, it |
| overhead of managing a corporation. Depending | | | | is possible that you could structure your business |
| on the state in which it is incorporated, there are | | | | as a corporation and ultimately lose control of it |
| paperwork requirements. Annual meetings must | | | | when the shareholders vote to remove you from |
| be held; minutes must be taken; votes, based on | | | | your position as president or CEO or whatever |
| the outstanding shares, determine corporate | | | | you are. |
| actions; and certain positions-president, | | | | Since each share represents a percentage of the |
| vice-president, and secretary for example-must | | | | voting power, if you own less than 50% of the |
| be held. Forms must be filed periodically, and the | | | | outstanding company shares, those majority |
| annual tax return itself can be complicated. | | | | owners could vote to remove you and send you |
| All of this maintenance activity costs money | | | | on your way. |
| because it translates to management by | | | | |