Corporate Liability

[terryandrene]

Frank:
I seems to me that many small truck expediters want to incorporate for the primary reason of protecting their personal assets from exposure to liability in the event of an accident or other mishap that might cause someone to sue the corporation. A secondary reason is a small FICA tax break on income paid to themselves in the form of dividends.

It also seems to me that any owner/operator leasee of a single truck, of any size, would be the president or other officer of the corp. As such, any negligence of the vehicle operator, perceived or otherwise, would expose that person's personal and corporate assets in the event of a civil action against them. In other words.. you maim a pedestrian, you lose your truck and your house.

Am I wrong? I know you disagree with a newbie in the biz incorporating but would you care to discuss the real benefits of an experienced couple or single doing so.

 

[Fkatz]

GOOD AFTERNOON TERRY & RENE

LAST TIME WE SAW EACH OTHER WAS AT THE EXPO, JUST HAD A BRIEF CONVERSATION, WHILE YOU WERE HELPING LAWRENCE AND DEBBIE OUT.

YOUR QUESTIONS OR STATEMENTS AS FOLLOWS ARE
Frank:
<I seems to me that many small truck expediters want to incorporate for the primary reason of protecting their personal assets from exposure to liability in the event of an accident or other mishap that might cause someone to sue the corporation.>

TERRY,
THIS IS BASICALLY TRUE ABOUT DRIVERS WANTING TO INCORPORATE DUE TO THE FACT THAT IT DOES PROTECT THERE ASSETS WITHIN LIMITATIONS.
IF THE O/O'S OR DRIVER WHO OWN ONLY 1 TRUCK AND USE THERE HOUSE, AND OTHER ASSETS TO FINANCE THE CORPORATION, THEN THEY STILL WOULD BE LIABILE NO MATTER, AND WIND UP LOSING ALL ASSETS ALSO DUE TO THIS MISTAKE.


A secondary reason is a small FICA tax break on income paid to themselves in the form of dividends.

YES THERE IS A VERY SMALL TAX BREAK

It also seems to me that any owner/operator leasee of a single truck, of any size, would be the president or other officer of the corp. As such, any negligence of the vehicle operator, perceived or otherwise, would expose that person's personal and corporate assets in the event of a civil action against them. In other words.. you maim a pedestrian, you lose your truck and your house.

AGAIN THIS IS TRUE AND NO DISCUSSION WOULD BE NECESSARY

Am I wrong? I know you disagree with a newbie in the biz incorporating but would you care to discuss the real benefits of an experienced couple or single doing so.

NO YOU ARE NOT WRONG, AS FAR AS YOUR EXPERIENCE WHICH IS QUITE A NUMBER OF YEARS THAT I KNOW OF. IT PROBABLY WOULD BE A GOOD IDEA AT THE PRESENT TIME TO INCORPORATE,IF YOU HAVE NOT ALREADY DONE SO. BUT WHAT I WOULD DO, IS INCORPORATE UNDER AN LLC, NOT AN "S" OR A PLAIN "C" CORP. BUT, SINCE I DO NOT KNOW EVERYTHING ABOUT LIMITED LIABILITY CORPORATIONS, WHICH I AM CHECKING INTO MORE THROUGHLY. FINDING OUT ABOUT THE HOW THE LAWS OF THE LLC ARE USED. THEN I CAN GIVE YOU AN EXACT ANSWER.

HERE IS A BASIC INFORMATION ON EXACTLY WHAT AN L.L.C. IS:
Limited liability companies, or LLCs, are becoming more and more popular, and it's easy to see why. They combine the personal liability protection of a corporation with the tax benefits and simplicity of a partnership. In other words, the owners (or "members") of an LLC are not personally liable for its debts and liabilities, but also have the benefit of being taxed only once on their profits. Moreover, LLCs are more flexible and require less ongoing paperwork than an regular "C" and "S"-Corporation.

Frank