When should I incorporate?
Congratulations, you just signed your first big contract or landed your first major role! Is it time to legitimise your business in the corporate sense? Maybe.
When I am reviewing the corporate structures (or lack thereof) of new clients, the first thing I look at is liability. What exposures does the client have? What assets are at stake?
If the liability is there and the client has substantial assets to protect, let's make a company!
However, there are some times where I find it's best to cool our heels and see how the next phase of the business develops. In this unpredictable world, we all know that any project can be a flash in the pan. Some mature and ripen into much bigger ventures, while others fizzle out and send you back to the drawing board. Before committing yourself to more overhead than you wish to carry, I would take a step back and look at the bigger picture.
Every corporate entity set up requires its own administrative maintenance -- bookkeeping, taxes, insurances, payrolls, and more. All of this comes at its own cost. What can your business bare in the beginning? I think it's best not to get too far ahead until the horizon is clearer.
I previously spoke briefly on this with Scion AV. You can watch a bit of it below.