Sole proprietorship: How likely am I going to be sued?

[robattoronto]

About to take a 6 month contract with a financial company as a Web application developer. Already have a sole prop company set up. But wondering if I should go through the hassle of incorporating.

I've already considered the expenses involved in incorporating and accountant fees and it goes against incorporating. But my biggest concern is the unlimited liability part where it goes into my personal assets.

Maybe the more experienced IT people here can comment and advice about this?

[Bullseye]

Limiting liability should never be the sole reason for incorporating. Just get liability insurance to protect you, much simpler.

[CheapScotsman]

plus they can always sue you personally as well as your business. While the charges may get dismissed or they are finally found inapplicable, it will still cost you tens of thousands in legal fees to get that far.

I would simply perform well and do what Bullseye suggests.

[robattoronto]

Thanks for the advice guys

[Just Confused]

Yes, the limited liability thing for small business corporations is overblown. If some one wants to sue you personally, they will find a way... like suing as a negligent director of your corporation. Statistically speaking unless you're really unlucky, really dumb or have criminal intent you probably won't get sued.

On the other hand, I still think incorporating a company is worth it. (I've been an incorporated IT consultant for years). Everyone talks about the hassle... all it takes is $200 and less time than you've already spent reading this thread in RFD. The only obligation once you're incorporated is to file your paperwork once a year and pay taxes. So where's the hassle?

If you're smart you'll hire an accountant to do the paperwork and taxes. So I say agian...where's the hassle? Accounting costs average about $1000 to $1500 a year. They will include your personal tax returns, so you get rid of that headache as a bonus. They will probably save you more in taxes than what you pay them in fees. Not only do contractors get paid more but they keep substantially more in after tax income.

The benefits of running a business instead of working as an employee are endless. Go to the Small Business forum here on RFD where it's discussed regularly. http://www.redflagdeals.com/forums/forumdisplay.php?f=62

Go here to incorporate through the feds for $200... can't be done cheaper anywhere else. http://www.ic.gc.ca/epic/site/cd-dgc.nsf/en/cs02717e.html

[harlequin]

Having your own corp gives you more flexibility for tax planning too.