So, your family business has been a corporation forever. All these years you’ve been dutifully filing your annual report with the Missouri Secretary of State’s office along with your annual fee; and filing the mandatory annual franchise tax return (even though you don’t owe any such tax). You know about “corporate formalities” and you’ve been putting some boilerplate shareholders and directors meeting minutes in your corporate minute book each year (even though you’ve rarely had a formal meeting). Or maybe you pay the big bucks annual retainers to your CPA and attorney for all of the above.
You’re a sole proprietor. It’s simple, uncomplicated and inexpensive, and best of all you don’t need an attorney. But it’s a little scary that everything you own is at risk for your business decisions.
Out of curiosity you corner an attorney at a Rotary or Chamber meeting for some free advice on limiting your personal liability. He/she suggests that you form a corporation; and after you hear about the fees and the formalities, the status quo sounds just fine. Your budget is tight right now, really tight; and lawyers are sooo expensive. (more…)