Freelancing itself is a bold venture, and to many, the idea of creating your own business entity around it feels both proper and very cool. One experienced self-employed contractor suggests skipping the expensive process, however, unless you’ve got a specific business case.
Michael Koretzky at the Money Talks blog notes that he did incorporate — to the tune of $US600 plus annual upkeep payments — but only because he had a big job that required sub-contractors and the resulting tax confusion. If he had to do it again, though, he’d think twice:
You can also Google it and find dozens of websites offering conflicting advice. My own advice is simple: Talk to your accountant and incorporate only if it helps your bottom line. I admit I did it partly because I thought that’s what all successful freelancers do. It’s the freelancer’s vanity, sort of like a Porsche for a middle manager.
There’s also a general perception that incorporating as a freelancer shields you from all liability and lawsuits relating to your business, but from this editor’s perspective, it’s often worth reading up on just how much you’re still exposed to before you hand over some serious money for small comfort.
Have you incorporated as your own freelancing entity and find the cost worth it? Know of a lower-cost way of distinguishing your practice? Tell us the tale in the comments.
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