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question about being incorporated and insurance
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Author:  elgintow [ Thu Sep 07, 2006 2:49 am ]
Post subject:  question about being incorporated and insurance
sugestions about this please. i want to cover my butt.
Author:  Guest [ Thu Sep 07, 2006 11:04 am ]
Post subject:  Re: question about being incorporated and insurance
Cover it from what?  

Someone getting hurt by/from your equipment?     Liability Insurance.

You crashing into them with your vehicle.      Car insurance.

Losing your equipment?        Inland Marine Insurance


I would say 99% of us are sole proprietorships.    You can be sued and lose everything, including your house.

Incorporation costs $1000 and you have stricter IRS rules to follow.    The corporation can be sued and lose only corporation assets.     The house and personal property can not be touched.
Author:  Keith02 [ Thu Sep 07, 2006 1:59 pm ]
Post subject:  Re: question about being incorporated and insurance
I think he's asked a valid question........Except he's asked the wrong folks....We ain't lawyers.

Myself, I'd like to know also.

Maybe he can find a legal forum and get some good advise then come back and share it with us here.

There are several items to be concerned with:

Liability, taxes and ex-wives.......just to name a few.
Author:  karyoker [ Thu Sep 07, 2006 2:41 pm ]
Post subject:  Re: question about being incorporated and insurance
Why inc????  insurance
Author:  Keith02 [ Thu Sep 07, 2006 2:49 pm ]
Post subject:  Re: question about being incorporated and insurance
karyoker @ Thu Sep 07, 2006 4:41 pm wrote:
Why inc????  insurance
Because there is more to be concerned with than just insurance.....A savy KJ can write off certain equipment purchases/losses and perhaps other expenses....Odds are tho he will need to be inc'd or something to be considered a 'business' for tax purposes.

The most successful small business is first most astute in the details of business.

Details, details, details!......They sux, but they are necessary.
Author:  Guest [ Thu Sep 07, 2006 5:53 pm ]
Post subject:  Re: question about being incorporated and insurance
Incorporation is a tool to seperate personal assets from personal litigation.  That does not mean that the protection is complete if there is criminal negligence or willful misconduct on the part of the officer or if the incorporation is seen by a judge as an act taken with the intent to use the incorporation as protection as part of a plan to perform a criminal act.

Incorporation is another form of business.  All assets associated with the business will remain seperate from personal assets and are taxed (local, state & federal) seperately from personal income.  In a sole propriator or partnership the profits generated are included in personal income.  In a corporation only those assets paid out to the employee/officer are considered income.  Have a lawyer/accountant involved unless you are really good at reading and understanding tax code.

Insurance is you betting that there is a good chance that you may have an unexpected loss or injury/damage to another individual/business and the insurance company betting that you don't.  Once incorporated, you really need to have insurance to protect yourself from nuisance claims from airheads that think that just because you are a corporation you have big bucks.  Again, temper all this with the cost of the insurance versus the risk/estimate of potential loss.
Author:  eben [ Thu Sep 07, 2006 9:59 pm ]
Post subject:  Re: question about being incorporated and insurance
One caution about incorporation. Unless you are doing S corp or similar, it will cost you more to be compliant and to dissolve than to incorporate. I had a friend who had to dissolve this incorporation and it took him in to 5 figures to get it dissolved.

I would suggest something like LLC (Limited Liability Corporation) or S corp to make it easy on yourself at the end.
Author:  Guest [ Thu Sep 07, 2006 10:46 pm ]
Post subject:  Re: question about being incorporated and insurance
I am not incorporated.   I do not expect to get sued, but you never know.

My tax man does just fine with all of my writeoffs at income tax time.   $15,000 of business deductions last year.

Office supplies, computer, van repairs, gasoline, equipment purchases & repairs, discs, songbooks, insurance, cell phone, office phone, office space, % of the utilities....Oh yeah

Save every business receipt.   All personal stuff should be paid for with cash.   All business related stuff, with a check.

A good taxman is well worth his fee.   :hug:  :yes:
Author:  Texas Gigi [ Sat Sep 09, 2006 3:37 pm ]
Post subject:  Re: question about being incorporated and insurance
We've had similar threads.

I have a small business--not music related. Here are some things I have found out.

>>A sole proprietorship or perhaps partnership is probably the best place to start. You can even hire employees or have contractors with this form of business (and the correct licensing, certifications, etc.). Gives you room to grow.

>>Register your name with the county. This is usually referred to as getting your DBA ("doing business as..."). It makes you official and prevent 14,000 JimBob Karaoke companies from competing for clientele in your area.

>>Keep business and personal finances separate. It's easy to get free checking accounts nowadays; my business has a separate one. Or use cash for personal and checks for business, like Bigdog.

>>KEEP ALL YOUR RECEIPTS for both income and expenses if you want to survive an audit. And hire a CPA at tax time.

>>Log every mile you drive that is business-related. You do not have to have a company car but you do have to have pristine records.

>>Insurance...ah, insurance. If you are playing a club, see if the club owner's policy covers you; MAKE the owner talk to their agent. You might be able to pay for a rider on their policy. For events such as weddings, your regular insurance agent can probably refer you to someone who offers event insurance in your area. For events such as organized festivals, you again might be able to get a rider on their policy if you are not automatically covered.

I hope this helps. The most important thing is to be professional and HAVE FUN.
Author:  Guest [ Sat Sep 09, 2006 3:51 pm ]
Post subject:  Re: question about being incorporated and insurance
My equipment policy will not cover my equpiment if I leave it anywhere, like over night.
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