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It Can Happen To You:
Why Any Sole Proprietorship Is A Risky Business

-- by Wayne M. Davies

Copyright 2003 Wayne M. Davies Inc.

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Are you still operating your business as a Sole
Proprietorship?

Have you considered incorporating your small business or
self-employment activity? 

The tax advantages can put thousands of dollars in your
pocket every year.

But the Number One reason to consider incorporating has 
nothing to do with tax reduction and everything to do with
asset protection.

Here's a story to help you decide whether forming a 
corporation is worth it.

A few years ago, one of my clients, let's call him Jim,
decided it was time to stop working for someone else
and start working for himself.

Jim was a plumber, and a darn good one. He's fixed my toilet
on several occasions.

It took a couple years of hard work, but Jim's reputation
spread fast and he soon had all the work he could handle.

Jim finally had to hire an assistant, a young fellow named
Tom.

One rainy Saturday afternoon, Jim got a service call and
asked Tom to handle it. This job turned into several hours
of lucrative labor, so by the time Tom was done it was dark.
The roads were slick and Tom was tired.

As luck would happen, another service call came in as Tom
was heading home. Jim offered Tom yet another chance to make
some good overtime pay. Tom reluctantly accepted.

Tom thought about stopping for a cup of coffee, but he was
eager to get done. As he drove through the torrential
downpour, Tom noticed the brakes in the company truck
weren't working like they used to. He remembered the
mechanic saying something about it the last time he
took the truck in for a tune-up, but he and Jim were
so busy lately they just forgot to get them fixed.

As he came to the next stoplight, Tom knew he was in
trouble. The brakes failed and the truck collided with 
another vehicle.

Tom's injuries were not nearly as serious as those of the
other driver, who eventually died.

Jim's insurance policy covered all the medical costs, but
the liability coverage wasn't enough to take care of the
amount that the other driver's family sought via the
negligence lawsuit.

End result: Jim suffered serious financial loss. Because
Jim's business was a Sole Proprietorship, he had to use all
of his personal savings to satisfy the claims of the
lawsuit.

So it can happen.  And it can happen to you.

Need I remind you just how prevalent lawsuits have become in
our society?

So if you are a Sole Proprietor, like Jim, why run the risk
of losing your personal assets from a business-related
lawsuit.

If you have employees, you can be held responsible for their
actions.

"But I don't have any employees", you say.

It could just as easily have been Jim rather than Tom who
was driving in the rain that night.  Likewise, it could be
you who is the cause of unintentional damage or some other
business-related accident.

Bottom Line:

If your business is a Sole Proprietorship you need to
incorporate because all your personal assets are at risk.

Make the move from the world of Unlimited Liability to
Limited Liability.

============================================================

Wayne M. Davies is author of the new eBook,
"Incorporation Tax Secrets Revealed:
The Ultimate Small Business Tax Reduction Strategy"
http://www.YouSaveOnTaxes.com/secrets

===========================================================

Title:
It Can Happen To You:
Why Any Sole Proprietorship Is A Risky Business

Author:
Wayne M. Davies

Author email:
Wayne@YouSaveOnTaxes.com

url:
http://www.YouSaveOnTaxes.com/happen-to-you.txt

autoresponder:
happen-to-you@YouSaveOnTaxes.com

word count: 525

character width: 60

keywords: 
incorporation, incorporate, corporation,
sole proprietorship

20-30 word description:
Here's a true story that demonstrates why any Sole
Proprietor is running a very risky business.

Author bio:
Wayne M. Davies is a Tax Professional serving small business
and self-employed clients in Fort Wayne, Indiana. Wayne has
been helping his clients reduce their taxes for the past 15
years.  Wayne provides a complete line of accounting,
payroll and tax preparation services for all business types:
sole proprietorships, partnerships, corporations and LLC's.

He is author of 2 tax eBooks for small business owners and
self-employed people:

"The Tax Reduction Toolkit: 29 Little-Known Legal Loopholes
That Will Reduce Your Taxes By Thousands"
http://www.YouSaveOnTaxes.com/toolkit

"Incorporation Tax Secrets Revealed:
The Ultimate Small Business Tax Reduction Strategy"
http://www.YouSaveOnTaxes.com/incorp

Resource box:
Wayne M. Davies is author of the new eBook,
"Incorporation Tax Secrets Revealed: The Ultimate
Small Business Tax Reduction Strategy" 
http://www.YouSaveOnTaxes.com/incorp

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link in the resource box.

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