Legal Question in Business Law in New York

Re: becoming a corporation

You don't need to set up a corporation to start a small business, and there are many good reasons not to. Most people think a corporation limits their liability in case somebody sues. This is only true sometimes -- usually on contracts like leases or trade purchases -- and some people get a nasty surprise when they are sued personally for non-contract matters -- like a negligence claim. If you are the person operating the business, and you accidentally run over somebody, or if you provide services negligently, which leads somebody to sue you, then they can and will sue you personally, despite the corporation. Those are the "big ticket" lawsuits, when you start to worry if all your assets are on the line.

Another disadvantage of a corporation is the need for an accountant and an attorney. Did you know, if you operate your business through a corporation, you need to have a lawyer represent you in any court action, even a small claims collection matter? That's one reason to remain a sole proprietorship, where you could represent yourself in such a case.

There are many pros and cons (including also tax considerations, which might be addressed to an accountant).

I suggest you spend a few minutes meeting with a local attorney who knows something about business matters and explain what it is you want to accomplish, and let the attorney recommend the best business form for you. For about $250, most attorneys will spend an hour or so and answer all these questions and make sure you understand.

If you just want to set up a corporation, there are a host of companies on the Internet and in the local paper which will do it for you, generally in NY for less than $200. Most of that is the NYS filing fees and a corporate kit, which comes with instructions for the lay person.

Re: becoming a corporation

Setting upo a corporation is routinely done by my firm and can be accomplished within 48 hours. It is important, however, that you understand the mechanics of owning a corporation and how setting up a corporation protects you. For a free consultation to discuss this, you can contact me directly. Andrew J. Campanelli 516-746-1600