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Corporate Opportunities

Corporate Opportunities

Does the Rule Apply to Real Estate? If you invest in and/or syndicate real estate what are the duties to your investors? You owe them a duty of loyalty. But how far does that go? The issue of corporate opportunities is important. I wrote a whole chapter on it (from...

Checkbook IRA

Checkbook IRA

A recent case has shed light on one of the riskiest retirement plan strategies put forth by promoters. In McNulty v. Commissioner (157 T.C. 10) a U.S. Tax Court brought clarity to the scheme of using self-directed IRAs for personal investments.

Piercing the Corporate Veil – How to Avoid It

Piercing the Corporate Veil – How to Avoid It

50% of piercing the veil court cases nationwide succeed because owners are failing to properly follow corporate formalities. This exposes business owners to personal liability - meaning they can lose their possessions. What is the Corporate Veil? What is the corporate...

Why Incorporate? Here Are 6 Good Reasons

why incorporate

There are many advantages to incorporating your business and assets by using the proper business entity. In fact, without it, you’ll have difficulty building business credit, which is often necessary for growth and stability. You’ll also be vulnerable to losing your wealth and assets in the event of lawsuit, divorce and legal judgements.

Corporations, limited liability companies (LLCs) and limited partnerships (LPs) are business entities that allow you to:

1. Keep Your Businesses and Personal Assets Separate

This can protect personal assets such as your home and bank account from claims against the business. This is far superior to using a sole proprietorship or general partnership, which again offer no asset protection.

2. Create Separate Entities for Greater Asset Protection

Some business owners create more than one corporate entity and segregate assets among different business entities for asset protection. This can lower each asset’s exposure to claims.

3. Build Business Credit

You won’t get far using a sole proprietorship for business credit-building purposes. You need a separately chartered and active (meaning all state fees are paid) business entity for this purpose. Read more about building business credit fast. It’s also worth knowing if you are likely to need business credit, as some industries will have a greater need for it. To see if you’re likely to need a business loan read this article.

4. Lower Audit Rates

Sole proprietorships are audited at a rate five times higher than corporations!

5. Enjoy Tax Benefits

There are also many tax benefits to using a corporation, LLC or LP. Many business expenses are easily written off and pre-tax dollars can be used for valuable benefits packages.

6. Make More Money

An Experian study found that incorporated business owners had incomes 35% higher than the overall population. Comparatively, unincorporated owners’ incomes are 24% higher. Additionally, the Experian study cited that Incorporated business owners are 94% more likely to exhibit “work hard, play hard” attitudes than unincorporated owners and the overall population.

My book, Start Your Own Corporation, discusses choosing the right entity in great detail.

Start your own Corporation 60

Corporate Opportunities

Corporate Opportunities

Does the Rule Apply to Real Estate? If you invest in and/or syndicate real estate what are the duties to your investors? You owe them a duty of loyalty. But how far does that go? The issue of corporate opportunities is important. I wrote a whole chapter on it (from...

Checkbook IRA

Checkbook IRA

A recent case has shed light on one of the riskiest retirement plan strategies put forth by promoters. In McNulty v. Commissioner (157 T.C. 10) a U.S. Tax Court brought clarity to the scheme of using self-directed IRAs for personal investments.