Incorporate or not?
My friend is starting up a tutoring business with another guy.
Initially they want to contract their services out to other tutoring companies and in about a year open up their own business.
Should they incorporate? What kind of entity should they go for?
Is there an advantage for this tax year to incorporate vs file a 1099s?
- Anonymous1 decade agoFavorite Answer
You can just call yourself a partnership, register, get professional insurance, and have them pay the corporation (need a collective checking account)
you do not want your name on a 1099, especially two people, cause the costs will get mangled. you just go to the county office and register DBA, and go to a credit union and open a business account, and get contract liability insurance (few hundred a year, which included insurance for a computer that has all the training material on it.)
they will be glad to pay a company that can prove it is a company - and a corp-to-corp 1099 just goes into the tax vapor somewhere....
oh, the advantage to incorporating or llc or llp is a reasonable insulation from being sued if the company does something wrong (teaches something that breaks something) unless it is criminal...most states have ways to incorporate online for very little money -