Can anyone elaborate why a home inspector should not operate as a sole proprietorship?
Numerous reasons. First, if you get sued and lose, your personal assets can be levied and taken by the plaintiff/creditor. Second, if you get a judgement against you, it harms your personal credit score. Third, you can’t dissolve you like you can a company or corporation. You’re stuck with you for life.
Sure. How about the flip-side? Reasons why one *should *operate as a sole-proprietor?
How much risk of litigation is there? There seems to be a lot of discussion about being sued on the forum but it seems pretty straight forward to me if the writen agreement or contract is used that nachi provides. And as long as safety issues are handled responsibly.
It don’t always work out that way in court…
Just on TV.
The flip side; it is less work and money as a sole-prop.
ie. If you plan to do commercial work you have to keep workmans comp and $1m vehicle insurance if your a corp. These are required just to enter the site.
In some States you may not be protected with a Corp. as much as you think. When it’s “just you” the Corp. is viewed as dodging responsibility.
If your the only one doing the work, your the only one responsible. If you have others, you need to be protected from their screw ups.
If you have something to protect, get protection…
If you don’t, play the Vegas Odds…
Recommend you remember all this information and go to a Lawyer and a Chartered account to get their help on what you should do.
This could be money well spent.
Yep. Here ya go: https://www.nachi.org/inc.htm
Thank you for all the information. I am currently a contractor ventuing out into the home inspection busines (yes i am fully aware of my obligations to avoid conflict of interest and will abide by the nachi standards). I am set up as a LLC but taxed as a sole proprietorship in the state of Montana. I will nedto talk to my accountant and maybe consult a lawer as my main question now is if i should seperat the two businesses or not. Thanks for all the help. I am suee i will have more questions.
Please let us know what he Accountant and lawyer says…
Thanks .for a good string . Roy
The taxes are less if you are a sole proprietorship. You put your assets in somebody else’s name to protect them. Lawyers normally will not pursue litigation if there are no real assets to claim against.