why incorporate

Gary Lawrence Murphy garym@canada.com
09 Jan 2002 10:44:06 -0500


>>>>> "r" == rotten elf <max@sentex.net> writes:

    r> Adam L. Beberg writes:
    >> If you had full transparency why would you even need to concept
    >> of a corporation anyway? The main reason to have a corp is to
    >> hide things.

    r> or so you can hire your friends and people you like without
    r> having to be their boss.

Or to pay lower tax rates on income held by the corporation, and thus
smooth out peaks and valleys in your annual sales rates and reduce
your personal taxes.

The year I got stung, and I am still paying it off, I'd had a banner
year, my first step out of hired-gun R&D and into consulting to Big
Business; as a proprietary business, all income is personal income, so
I was hit with a $40,000 tax bill.  The following year, there were no
contracts to speak of, total company income of $3000; as a corporation
which pays less than half the personal income tax rate (in Ontario), I
could have paid myself $40k each year and saved tens of thousands in
taxes.

-- 
Gary Lawrence Murphy <garym@teledyn.com> TeleDynamics Communications Inc
Business Innovations Through Open Source Systems: http://www.teledyn.com
"Computers are useless.  They can only give you answers."(Pablo Picasso)