More than once I’ve been told to incorporate my business. .”Nah,” I’ve thought. “I’m small. I’ll remain a sole proprietorship.” However, when I consider the risks, I know I need to make that change…and fast. While attending BlogWorld & New Media Expo in Los Angeles, CA this past November, I met Nellie Akalp, the CEO of CorpNet, an online incorporation service that helps people start a business by managing the business filings to incorporate online. I noticed that her company was offering these services at great prices–prices even I could afford! I took her information, vowed to make a change in 2012 and contacted her to ask her to write the following blog post. I thought all writers and authors should understand the importance of incorporating their businesses.
New Year’s Guide to Incorporating Your Writing Business
By Nellie Akalp
If you’re a writer, blogger or author, you might not think of yourself as a “business person.” But the truth is, if you make a full-time living from writing, you are in business. And you might as well gain the benefits and protections of being “a business” rather than staying unprotected as a sole proprietor.
If you’re trying to decide on a New Year’s resolution for your writing business, deciding to incorporate yourself should be at the top of your list. There’s no better way to reduce your risk, improve your credibility and feel like a real “business person.”
Here are a few of the most frequently asked questions that my company, CorpNet, gets from writers and bloggers who are trying to decide whether to incorporate:
Why should writers, bloggers and authors incorporate a business?
There’s a reason why they call starting a business “hanging out a shingle.” If you don’t incorporate, you might be left “hanging.” If you’re a sole proprietor operating without a corporate structure, you are vulnerable to some of the worst-case scenarios of running a business. Whether it’s a catastrophic financial loss or a lawsuit, incorporating a business gives you the peace of mind of knowing your personal assets are protected from the potential liabilities of your business.
What are the biggest benefits of incorporating a business?
The personal asset protection that comes from operating under a “corporate veil” is one of the biggest benefits of incorporating a business, especially for writers. If someone decides to sue you for defamation or libel for something you wrote on your blog or in your book, even if the lawsuit is totally frivolous and without merit, the legal costs of fighting a lawsuit can be ruinous. Incorporating yourself as an LLC (limited liability companies) or other corporate entity can reduce your personal liability and protect your family’s financial assets.
Depending on your choice of business structure, incorporating yourself as an LLC or S-Corporation can also have some potential tax benefits. Especially if you are a published author or widely-read blogger who earns a lot of your income from “passive income” sources like book sales, royalties or intellectual property, you might be better off incorporating as an S-Corporation in order to reduce your self-employment taxes.
What do writers, bloggers and authors need to do in order to incorporate a business?
It’s easier than ever before to incorporate a business. You don’t need an attorney to incorporate a business, and you don’t need to stand in line at the post office. Online incorporation services like my company, CorpNet, do all the “legwork” for you.
First, choose a business structure – some of the most popular corporate entities for bloggers and writers are LLCs and S-Corporations.
Second, hire CorpNet and choose a package of services to select the right corporate entity and all the features you need.
Third, wait a few weeks until CorpNet has processed your paperwork and gotten your new business on file with your state authorities. (Rush services are available for an added fee.)
It’s easy! If you still have questions or just want to get a sense for what your options are, please call CorpNet for a free business consultation. We’re always happy to help bloggers and writers take the leap into becoming full-fledged business owners.
Happy New Year, and may you have a productive and prosperous 2012!
About the Author
Nellie Akalp is a passionate business blogger and CEO of CorpNet, an online business filing service that helps bloggers, writers, authors and other entrepreneurs start a business and incorporate online. Follow Nellie Akalp on Twitter or at the CorpNet blog.