I have heard of some (rather successful) writers incorporating - that is, creating a corporation of which they are the sole member. What are the potential advantages (or disadvantages) of doing this?
As this probably varies a bit by location, I am specifically interested in how this applies in the United States.
Also, I know this veers rather close to being a legal question, but I am not asking for legal advice, nor am I asking if I should incorporate. I am merely wondering why people consider this option. Obviously someone seriously considering this would want to consult a lawyer and/or accountant.
If people still think this is "too legal", we can talk on meta or chat.
Answer
Officially, the reason to incorporate is to protect your personal assets if someone decides to sue you over your writing. If you're incorporated, they would instead have to sue the corporation, and your personal property can't be touched.
My own reason for incorporating was to get access to only-somewhat-ridiculously-priced health insurance. Buying health insurance is a pita if you're self-employed. In California, though, corporations (with two or more employees) are what's called “guaranteed issue”—i.e., insurance companies have to offer you a plan. The two employees of the corporation just happen to be my husband & myself, allowing us access to insurance options we couldn't otherwise get.
There are also some advantages in terms of non-fiction writing opportunities. Corporations these days are very leery of hiring freelancers who might appear to be employees, and they're more likely to hire you if they can pay a corporation.
For an individual who writes fiction and doesn't have serious assets? I'm not sure what advantages there would be, if any.
No comments:
Post a Comment