Hello There, i am getting some contract computer work from few individuals and i need they to pay me to my company.
I was thinking of a sole propritory company. Is this advisable or should i form a corporation .
In case of sole prop. what kind of insurance should i be taking and also can i form a corporation just by myself(one person).
Any input will be greatly appreciated.
Regards

Christy Caley

One of your first to do items should be to contact an accountant and be advised on your options in terms of remaining sole, incorporating or forming an LLC.

Your local SBA chapter will also have information for starting your company as well.

ScottGem

I have been doing freelance computer consulting for almost 29 years. I work under a sole propritership because the income is just not enough to justify the expense of an attorney or incorporation.

Your biggest issue will be cashing checks made out inthe business name. I would check with your bank about whether you need a business account or whether they will accept an endorsement like:

Joe Smith
for My company.

My bank had no problem with that. However, these days I get paid mostly thru PayPal.

Northwind_Dagas

The primary reason you would want to form a company other than sole proprietor is to limit your personal liability. A sole proprietor can be sued directly and penalties can be accessed against personal property.

An example: If you install a power supply into someone's computer, and it later catches fire and burns the house down, they could sue you for negligence (whether they could prove that or not is another matter). If they were to win a large judgment against you, you could lose your home or other property.

In KY, it cost me $40 to form an LLC, plus $15/year for an annual report. Cost should not be a tremendous barrier if you take advantage of free/low cost help to file your initial paperwork.

As for just one person, it varies by state. Some states allow you to file for LLC if you are just one person. However I think most states require at least 3 people for a corporation.