The Training Associates (TTA) has been in the business of deploying learning and development (L&D) professionals for over two decades. Our L&D talent, all of whom are independent contractors, enjoy the opportunity to work on a variety of training projects across different industries, with the flexibility that a contract position offers, including the ability to select engagements that work best for their interests and schedules. For clients, the adaptive workforce of L&D professionals offers them the expertise to support their L&D initiatives of any size or scope across all training modalities.
While this business model is advantageous to both parties, we continue to see an increased demand from clients for L&D professionals that are either incorporated or operating as a limited liability company (LLC). This is due to state and federal agency audits of companies that may have erroneously misclassified employees as independent contractors.
Incorporation is easy, and there are many benefits to incorporating. Here are five benefits of becoming incorporated:
- Deductible Expenses: Both corporations and LLCs may deduct normal business expenses. Additionally, expenses such as start-up costs, equipment, professional dues, work-related educational expenses, and legal or tax advice may be allowed as deductible business expenses.
- Tax Flexibility: Though profit and loss typically pass through an LLC and get reported on the personal income tax returns of owners, an LLC can also elect to be taxed as a corporation.
- Personal Asset Protection: Both corporations and LLCs offer what is known as “limited liability”, a way for owners to separate and protect their personal assets from judgments against the corporation. When corporate formalities are properly observed, owners are shielded against the claims of the corporation’s judgment creditors.
- Name Protection: In most states, other businesses may not operate under your corporate name in the same state in which you are incorporated.
- Added Credibility: Adding “Inc.” or “LLC” after your business name lends a degree of professionalism and credibility to your enterprise. Consumers, vendors, and partners may prefer to do business with an incorporated company.
You can quickly, easily, and inexpensively achieve these benefits and mitigate your personal liability by forming an entity separate from yourself to run the business. Take these easy steps to incorporate your business. Here are a few helpful links to help you get started.
It is important to remember, while incorporation comes with important benefits, it may not be the best option for everyone. It is always best to seek the guidance from a CPA or other tax professional.