Small business

[dubiousguy]

When does it make sense to change one's business from a sole proprietorship to a corporation. Does the corporation need to make a certain amount of money?

[Michael A. Maiman]

If you operate your business as a "sole proprietor" your company financials are on your personal tax return on what is called "Schedule C". There are benefits to having a seperate entity for your business which can be either a Partnership (you and your spouse or any other person) or a Limited Liability Company (LLC) or a Corporation (either S or C)... which include limiting your personal liability (personal assets cannot be touched) and giving you tax benefits and other incentives that are not available to a "sole proprietor". You should speak to your Tax Advisor/CPA for their opinion of if or when you should change your business entity... there is a cost to this since another tax return must be prepared and filed and usually for LLC's and Corporations there is an annual cost thru the State you are registed in which may vary... I hope this helps... Mike M