Overview: Corporations - KCBD NewsChannel 11 Lubbock

Overview: Corporations


While incorporation requires more paperwork and expense than sole proprietorship, it does give you one critical benefit - protection from liability.

A corporation is a separate legal entity from the person (or people) that owns it. The corporation, not the owner, enters into business deals, owns property, borrows money, and engages in other business activity. Because the corporation is involved in these business deals, you and your personal assets will, in many cases, be protected from liability if something goes wrong.

For businesses with more than one owner, incorporating can often protect you from the actions and misdeeds of your co-owners. This is unlike a partnership, where each partner is personally liable for the business-related actions of all the partners.

There are other benefits to incorporating. You can gain access to benefit plans only available to corporations. It also creates a positive image for your company - when you are trying to raise capital, obtain credit card merchant status, win certain kinds of new customers, or do business in foreign countries, incorporation can be important for appearance's sake.

You should be aware that corporate liability protection is not absolute. If you are interested in incorporation because of the protection it promises, look at the following exceptions:

  • It cannot protect you from your own bad acts. Being a director of a corporation does not protect you from personal liability from the wrongs you personally commit. For example: You run a package delivery service and you fill in for a driver who has called in sick. If, in the process, you run into a busload of people, you are personally liable for the damage.

  • It cannot protect you from things you personally guarantee. Banks and some corporate creditors often require personal guarantees from people in a corporation. So if your business were to fail, you would be personally responsible for repaying these debts. In addition, you don't want to become personally liable inadvertently... so be certain your name, title, and company name are on anything you sign.

  • It cannot protect you from owing governmental trust fund taxes (withholding taxes and sales taxes). When taxes are held in trust, all officers and anyone who has check-signing authority are jointly liable to the government for these taxes. That means that as a principal, you cannot hide behind the corporation and will be personally liable for these taxes if they are not paid.

  • It cannot protect you from some state laws. New York, for example, has a law which says that the ten largest shareholders of a corporation are personally responsible for unpaid employee wages. If a restaurant operates for three years and goes out of business, the owners and principals are personally responsible for any unpaid salaries.

  • It cannot protect people in certain professions. Professionals including doctors, lawyers, and accountants are personally liable in any lawsuit.

Copyright (c) 2008 Studio One Networks. All rights reserved.

INFORMATIONAL DISCLAIMER The information contained on or provided through this site is intended for general consumer understanding and education only and is not intended to be and is not a substitute for professional financial or accounting advice. Always seek the advice of your accountant or other qualified personal finance advisor for answers to any related questions you may have. Use of this site and any information contained on or provided through this site is at your own risk and any information contained on or provided through this site is provided on an "as is" basis without any representations or warranties.
*DISCLAIMER*: The information contained in or provided through this site section is intended for general consumer understanding and education only and is not intended to be and is not a substitute for professional advice. Use of this site section and any information contained on or provided through this site section is at your own risk and any information contained on or provided through this site section is provided on an "as is" basis without any representations or warranties.
  • Medical Network- Laser Hair RemovalMore>>

  • American Laser Centers- About Us

    American Laser Centers- About Us

    American Laser Centers offers the best energy-based laser hair removal treatments available, combining effective laser hair removal technology with versatile & safe radio-frequency therapy.
  • Laser Hair Removal - Information

    Laser Hair Removal - Information

    American Laser Centers offers the best energy-based laser hair removal treatments available, combining effective laser hair removal technology with versatile and safe radio-frequency (RF) therapy.
  • Laser Facial Hair Removal - Information

    Laser Facial Hair Removal - Information

    Unlike other parts of your body, your face is exposed to the world in every season and every situation. That's why unwanted facial hair can be a constant source of annoyance and irritation, and why laser facial hair removal is such a popular procedure at American Laser Centers.
  • Skin Rejuvenation - Information

    Skin Rejuvenation - Information

    American Laser Centers' unique Skin Rejuvenation Protocol combines the revitalizing effects of our energy-based skin rejuvenation system with the gentle exfoliating properties of Microdermabrasion to offer you safe, comfortable and effective skin renewal.
  • Skin Tightening

    Skin Tightening

    Sagging skin and wrinkles on your face are some of the most obvious signs of age. Until recently, the only ways you could fight the effects of time on your facial appearance involved injections or surgical facelifts, with results that too often resulted in an obvious, unnatural appearance.
Powered by WorldNow

5600 Avenue A
Lubbock, TX. 79404

FCC Public File
publicfile@kcbd.com
806-744-1414
EEO Report
Closed Captioning

All content © Copyright 2000 - 2014 Worldnow and KCBD. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.