Ask Me Help Desk - Incorporate yourself?

I had heard you can gain a new credit file and thus gain more purchase power by incorporating yourself. Is this true? If so, how much does it cost, what's the process and what are any drawbacks?

I think I've seen DIY kits for this in an office supply store but I don't know anything about it. What it does for me, what it entails, how much it all costs...

My reason for wanting to do this is to purchase a comercial property and have a business there. I simply can't do it with my current credit situation, although I am trying to fix this situation but it's going to be a looooong road and time is of the essence. I just don't have years to wait. I need to get on with things. I'm in a rather stagnant situation, and this is a way out for sure.

If not this then what else could I do? I have to factor in the cost of the property, the licenses I will need and renovations. That adds up to quite a bit, I'm estimating at about $115,000, maybe less but I'm planning for the worst. Needless to say, I don't have $115K sitting around! The property is listed at $85K.

The other option I had thought out was purchasing bare property, but the price of land in this area is HIGH ($10 to 20K per acre at least) and drilling a well, septic and having electricity put in cost so much (all told about 70K, and then you've got to build a building on top of all that! ) it's just absurd and really out of the question. It's just cheaper to deal with an exisitng building I think, although if I could do it, I'd be open to it but I think it's going to be a whole lot easier to do it the other way and just buy the existing commercial property. Also the fact that the business that I want to conduct there is already OK'd in this particular spot, whereas elsewhere it might be a lot of trouble getting approved for it.

SO basically, I want to jump on this opportunity, get moving on things and get somewhere but credit is what's holding me back.

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Originally Posted by passmeby

I had heard you can gain a new credit file and thus gain more purchase power by incorporating yourself. Is this true? If so, how much does it cost, what's the process and what are any drawbacks?

I think I've seen DIY kits for this in an office supply store but I don't know anything about it. What it does for me, what it entails, how much it all costs....

My reason for wanting to do this is to purchase a comercial property and have a business there. I simply can't do it with my current credit situation, although I am trying to fix this situation but it's going to be a looooong road and time is of the essence. I just don't have years to wait. I need to get on with things. I'm in a rather stagnant situation, and this is a way out for sure.

If not this then what else could I do?? I have to factor in the cost of the property, the licenses I will need and renovations. That adds up to quite a bit, I'm estimating at about $115,000, maybe less but I'm planning for the worst. Needless to say, I don't have $115K sitting around!! The property is listed at $85K.

The other option I had thought out was purchasing bare property, but the price of land in this area is HIGH ($10 to 20K per acre at least) and drilling a well, septic and having electricity put in cost so much (all told about 70K, and then you've gotta build a building on top of all that!!) it's just absurd and really out of the question. It's just cheaper to deal with an exisitng building I think, although if I could do it, I'd be open to it but I think it's going to be a whole lot easier to do it the other way and just buy the existing commercial property. Also the fact that the business that I want to conduct there is already OK'd in this particular spot, whereas elsewhere it might be a lot of trouble getting approved for it.

SO basically, I want to jump on this opportunity, get moving on things and get somewhere but credit is what's holding me back.

I really don't understand any of what you post. A few threads ago, you were saying you wanted to co-sign to help your friend get a mortgage - now, here you are saying that you don't have good enough credit to obtain a loan to purchase commercial property.

You post that you're interested in opening a bar; then you post that you want to become a bail bondsman.

You post that your husband works as a corrections officer; then you post that your "cellie" told you you'd get money for the time you served in prison. Oh, and the ever classy toddler's shirt that reads "F* the police" who also happen to be employing your husband.

I have no idea what's up or down with you any longer. Every time you post, a new story comes out which is completely opposite from the last thing you posted.

I did NOT ever say I wanted to co-sign for a friend! I wanted advice to help her get a mortgage on her own as she had approached me about renting my house when I move, but I did NOT want to rent it out, I want to sell it. I was wanting to help point her in the right directions and to see if there was specific help for her particular situation. I told her what some people suggested but she has not done anything, so it's her loss. I'm willing to help her, not do everything for her-because it would help me as well, as I would have a ready buyer for my house if she was approved.

I would NEVER co-sign for anyone for anything!

Incorporating myslef would be for the bar. I simply had heard some things about it, that you can gain purchase power (as I NEED to purchase a commercial property) and would have start-up costs for starting the business obviously. So I wanted to know more about Incorporation-pros, cons, what all it would do for me and any drawbacks and so on.

I have interest in being a bail-bondsman but I also have interest in having a bar. Which one I'll ultimately do is still in question, but I think it will be the bar most likely. I think it would be more fun and something I'd truly thoroughly enjoy doing for the rest of my life even.

I've been mostly a housewife for a while now, and things are evolving in my life right now-I am finding some ground to take some new chances and explore some ventures. I've had a college education, I've been in the military and I've had a few different jobs here and there but up this point had not really felt like I was ready to committ to anything as much as I am right now. Therefore I am exploring an array of avenues and asking a variety of questions.

Does that clear things up? The purpose of this question is to mainly find out about the process and pros/cons of incorporation from an experienced party. A Google is just not sufficient as far as I'm concerned, I wanted a personal answer from someone who knows about it/has done it and to be able to ask follow-up Q's.

Sounds like a potential scam on your part. Unfortunately, by incorporating yourself will definitely NOT improve your credit score or credit history. Nice try, no cigar. Think up something else instead as this scam won't work.

First, you are under moderation for previous issues. This means that your posts will not appear to the public until a Mod sees it and approves it. So do NOT keep posting the same posts over and over. I've approved your response and deleted the duplicates.

Second, No, creating a corporate entity will not improve your credit. You cannot incorporate "yourself". You can setup a corporate entity to purchase and run the bar. But that entity will have no better credit rating then its principals, unless it has better capitalization. In other words, to get credit for the corporation you will have to prove the corporation doesn't need the credit because it has sufficient capital.

Thank you Scott, you cleaed that up in about one good sentence!

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In other words, to get credit for the corporation you will have to prove the corporation doesn't need the credit because it has sufficient capital.

Duly noted on the posting thing, sorry 'bout that. It's just that a lot of posts have yet to show up and it's been weeks so I thought that some are getting thrown out or something (and NO they were not "bad" or anything, they were just plain ol' replies! ) But-I will not re-post.

Wow, twinkie, that was harsh... how did you get that I was trying to do some scam? Not at all! I had simply heard bits (wrong bits apparently!) here and there that by creating a corporation (incorporating), you are seen as "the business" and the potential success of "the business" is accounted for, rather than as "an individual" is seen, as far as gaining credit and backing to start a business. Not a scam at all! Just thought from the random bits and pieces I had heard that it could be an avenue to starting a business without much money up front and with mediocre (personal) credit. I just didn't understand how it all worked, that's all. And obviously, you can't rely on what you "hear" as I see the info I heard was not very good at all! That's EXACTLY why I asked, to get the real deal-I didn't absolutely BELIEVE everything I had heard, but I thought perhaps there could be "something" there amidst it al!! If creating a corporation would've helped me to start my business, then I would do it. I want to do this ideally for the rest of my life and retire from it, so I'd hardly want to be involved in any kind of fraud, that would just be stupid in more ways than one. I just want to get as much help as I can get to start this up and I'm looking into and investigating every little lead I think I might have, of course 99.9% will lead to nothing but if I don't try I won't ever succeed. I will get it... eventually. Perhaps I will have to wait a long time after all, but if I must, I must. Hopefully not too long though!

Luckily a family friend owns the place I want to buy but he's difficult to deal with. I have a feeling that eventually we will come to a deal if I can't purchase it outright the traditional way, although of course I'd prefer to do it that way. And I'd still have high initial costs and it'll be a while before turning a profit, so it's going ot be tough. So... incorporation wasn't the answer. Ah well, moving right along... just do it the old fashioned way-hard work. That never fails!

Thanks for the answer, Scott. If anyone else happens to come by and has some pertinent info, feel free to add it, I appreciate it!