<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40"> <head> <META HTTP-EQUIV="Content-Type" CONTENT="text/html; charset=us-ascii"> <meta name=Generator content="Microsoft Word 12 (filtered medium)"> <style>  </style>  </head> <body lang=EN-US link=blue vlink=purple> <div class=Section1> <p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"; color:#1F497D'>Great!!  Thank you.<o:p></o:p></span></p> <p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"; color:#1F497D'><o:p> </o:p></span></p> <div> <div style='border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in'> <p class=MsoNormal><b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>From:</span></b><span style='font-size:10.0pt;font-family:"Tahoma","sans-serif"'> pianotech-bounces@ptg.org [mailto:pianotech-bounces@ptg.org] <b>On Behalf Of </b>Bruce Dornfeld<br> <b>Sent:</b> Sunday, February 24, 2008 1:03 AM<br> <b>To:</b> pianotech<br> <b>Subject:</b> Re: insurance<o:p></o:p></span></p> </div> </div> <p class=MsoNormal><o:p> </o:p></p> <div> <p class=MsoNormal><span style='font-size:10.0pt;font-family:"MS Sans Serif","serif"'>Insurance and protection by forming a LLC is a subject that I wrote a little about for the Economic Affairs Committee and ran in the Journal less than a year ago.  Below is the article.   A couple of resources are mentioned, it may be beneficial for you to take a closer look at some.<o:p></o:p></span></p> </div> <div> <p class=MsoNormal><span style='font-size:10.0pt;font-family:"MS Sans Serif","serif"'> <o:p></o:p></span></p> </div> <div> <p class=MsoNormal><b>                                                                                                           Cover Your Assets<o:p></o:p></b></p> </div> <div> <p class=MsoNormal align=center style='text-align:center'>Bruce Dornfeld, RPT<o:p></o:p></p> <p class=MsoNormal align=center style='text-align:center'>Economic Affairs Committee<o:p></o:p></p> <p class=MsoNormal><o:p> </o:p></p> <p class=MsoNormal><o:p> </o:p></p> <p class=MsoNormal>People will try to protect what belongs to them in different ways when in business.  Insurance is always the primary way, the first wall of protection.  Insurance has limits depending on the policy and what it does or does not cover.  Without adequate protection, in a worst case scenario, your life savings, retirement accounts, house and all of your property are potential targets for someone suing.  If your business is a corporation, only the business assets are at risk in most common situations.<o:p></o:p></p> <p class=MsoNormal><o:p> </o:p></p> <p class=MsoNormal>The number one reason people incorporate is limited liability.  As a sole proprietor, your liability for business debt is unlimited; all of your assets are at risk.  Forming a corporation, probably an S Corporation, or limited liability company (LLC) makes your personal assets and your business assets clearly separate.  This protects them from some types of risk, but certainly not all.  Money your business owes its creditors or contractors would be limited by forming a corporation or LLC.  This assumes that these obligations were made by the company and not just in your name.  Always read the small print!<o:p></o:p></p> <p class=MsoNormal><o:p> </o:p></p> <p class=MsoNormal>Still, being a sole proprietor or partner may make perfect sense for you.  According to <i>Incorporating Your Business for Dummies</i>, “Many lawyers and doctors are sole proprietors because state laws refuse to limit the liability of professionals, especially when the matter involves professional negligence or malpractice.  Perhaps your business is relatively small and the product or service you provide is unlikely to create harm or damage.  If so, limited liability would be unimportant to you.”<o:p></o:p></p> <p class=MsoNormal><o:p> </o:p></p> <p class=MsoNormal>Forming a LLC would not change how you pay taxes, but it is possible that you could save money in taxes by incorporating.  Your corporation can pay you a salary that would be taxed as normal income, but then can pay you a dividend that is taxed at a lower level.  You would pay less Social Security tax.  If your corporation provides you with health care or similar normal benefits, they would be deducted from the business bottom line before taxes.  However, tax laws in recent years are being reformed to close some of the loopholes that could motivate incorporating to save on taxes.  Corporations also need to file taxes separately, making for a bit more work at tax time. <o:p></o:p></p> <p class=MsoNormal><o:p> </o:p></p> <p class=MsoNormal>There are initial costs to incorporate and quarterly paperwork also.  One web page that can help you through the process is <a href="http://www.mycorporation.com/">www.mycorporation.com</a>.  It is from Intuit, the same folks who bring us Quicken, TurboTax, and QuickBooks.  Since the laws differ from state to state, and they each set their own fees, the cost for incorporating can vary from around $100 to $800.  <o:p></o:p></p> <p class=MsoNormal><o:p> </o:p></p> <p class=MsoNormal>The more basic your piano service company is, the more likely you are best off as a sole proprietor.  If you have a more complicated business, and more liability concerns, then you should take a good look at the different options of incorporating or forming a LLC.  Good business insurance is your first and best protection.  The Safeco policies that have been developed for the PTG are proven and hard to beat!  Be sure to review your policy and consider growth or changes to your business, and don’t forget good auto insurance.  If you think incorporating your business might make sense for you, look at the resources mentioned above and talk with a good lawyer who knows the la! ws in your state.  Just make sure your assets are covered and remember: the large print giveth and the small print taketh away.  <o:p></o:p></p> <p class=MsoNormal><o:p> </o:p></p> <p class=MsoNormal>  <o:p></o:p></p> </div> <div> <p class=MsoNormal><span style='font-size:10.0pt;font-family:"MS Sans Serif","serif"'> <o:p></o:p></span></p> </div> </div> </body> </html>