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.
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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