Should I start my own company?

When you’re running a home based business, it’s considered a wise idea to setup a company, not only for tax purposes, but for your own protection.

Whether your home business offers “offline” services, such as cleaning, lawn mowing or even a lemonade stand or you’re running an online business from home – if you don’t have the proper business setup, you could be setting yourself up for a whole heap of trouble.

When you run a business that is offered by you as an individual, you alone will be held liable if troubles arise. This means that if you perform a service or sell a product that causes harm or doesn’t live up to the purchaser’s expectations, if this customer decides to sue, then it’s your personal assets that will be the target of any action that the court decides.

Even individuals that use a DBA are not “covered” when bad situations arise. A DBA provides no liability shielding from a transaction gone wrong.

I stumbled upon a post the other day on Aviva Directory that explains in detail some of the aspects of companies setup by individuals who wish to protect themselves from personal liability when transactions go bad.

You can checkout the post on the Aviva Directory by the following link:

10 US Laws every Domainer needs to know

You can start out in section 3 of the posting, that’s where details about DBA’s, LLC’s C-Corp’s and S-Corp’s are explained. If you happen to be running an online home based business, then the entire post is a fantastic read that is highly recommended.