To incorporate or not to incorporate? That is the question.

By Nina Kaufman • Jan 9, 2009

Opinions expressed by Entrepreneur contributors are their own.

I read that incorporating your business is not worth it if you only make $10,000 to $12,000 per year. Is it true that the real breaks don't start until around the $30,000 per year profit mark? How does a business owner know when he would benefit from incorporating?

There are benefits far beyond taxes that would lead you to incorporate -- such as protecting your personal assets. It doesn't matter how little you earn, if you are not doing business as a corporation (or LLC), your personal assets are at risk from judgment creditors.

If you're only earning $10,000 a year from your venture, you also have other important issues, namely, have you done the right business planning to make your business a success? If you're serious about moving forward with your business, speak to an attorney and an accountant to determine the business form (corporation or LLC) that's right for you.

Nina Kaufman

Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.

Editor's Pick

After Her Brother's Death in Iraq Became News, a PR Strategist Learned Firsthand Why the Way We Tell Stories Matters — and It Changed Her Career

A Leader's Most Powerful Tool Is Executive Capital. Here's What It Is — and How to Earn It.

One Man's Casual Side Hustle Became an International Phenomenon — And It's on Track to See $15 Million in Revenue This Year

3 Reasons to Keep Posting on LinkedIn, Even If Nobody Is Engaging With You

6 Time-Saving Tips to Know Before Starting a Side Hustle This Summer

Why a Strong Chief Financial Officer Is Crucial for Your Franchise — and What to Look for When Hiring One

Most Popular

See all

Growing a Business

This Stock Screener is on Sale for Memorial Day

invest while mitigating risk with this top-rated stock screening app.

By Entrepreneur Store

Starting a Business

5 Tips For Launching a Business While Keeping Your Day Job

Launching a business while holding down a 9-to-5 is no small feat. It's a common path for aspiring entrepreneurs, but it's not without its challenges.

By Nikita Fedorov