4 ms·

Did he really need to incorporate just to sell a shareware program over the internet? What are the benefits of that?

• delano 18y ago
  Taxes and liability.
  • utnick 18y ago
    but isnt the tax benefit of a single person LLC just the ability to deduct expenses? Besides forming an LLC he had almost no expenses. And I highly doubt his desktop gui is going to be liable for anything right?
    • tstegart 18y ago
      An $800 incorporation fee is a small price to pay to separate your personal liability from your business liability. Especially if you have other assets, like a house or pension.
    • tstegart 18y ago
      Future expenses will most likely add up to more than the incorporation fee, so it makes sense. Stuff like traveling, mileage, a new computer, rent if the business expands. As the business grows he will be able to deduct more. However, I believe you can also deduct as a sole proprietorship, so the tax benefits of an LLC are more about removing the double taxation of corporations than being able to deduct expenses. But an LLC makes things clearer and formally separates your business from your personal life, so you can track exactly how well its doing and what expenses and income are associated with each.
• balsamiq 18y ago
  Hey there. The main reason I incorporated is to give my potential customers (I am going after large enterprises) a warm and squishy feeling of being able to trust me. :) That, and liability, and taxes, and I have big plans for Balsamiq, so I thought I might as well incorporate right away.
  • tstegart 18y ago
    On a side note, its ironic that customers like doing business with a corporation more than just a guy. They think if you're a corporation, well then they know where to find you when things go down the tubes. Of course, when they finally do find you, they'll be limited in how much they can get from you because of your incorporated status.