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Taking It Home

Home is where the heart is, but do you want to hang your corporation's hat there?

Q: In setting up a corporation for my computer software consulting business, do I have to use my home address for the corporate address? If so, what are the risks of doing so?
Eric Sulistiawan
Via e-mail

A: Your home address may be used as your corporate address to meet the requirement that a corporation must provide a registered office. (Your registered office is where you receive official corporate correspondence and service of legal process.) But if you have business guests or employees, it may not be feasible to actually conduct the day-to-day affairs of your business in your home-that will depend on local zoning and homeowner association restrictions. If you rent, it also depends on your landlord. If your lease is not specific about that, get your landlord's permission in writing.

The primary risk? If served with legal process, you'll receive it at home. And unless you've clearly delineated corporate assets from personal ones, you could jeopardize your home and its contents to satisfy the debts of the corporation. To make sure this doesn't happen, your corporation should be adequately capitalized and should issue stock, keep accurate records, hold formal meetings and keep corporate funds separate from personal ones.


Paul and Sarah Edwards' most recent book is Changing Directions Without Losing Your Way. Send them your start-up business questions at www.workingfromhome.com or e-mail entmag@entrepreneur.com

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This article was originally published in the October 2001 print edition of Entrepreneur with the headline: Taking It Home.

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