What to do if I’m thinking about dissolving my business corporation in order to lower the overhead and slow down?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
What to do if I’m thinking about dissolving my business corporation in order to lower the overhead and slow down?
I am a holistic practitioner and a massage therapist and am covered with a 2mill/6mill liability insurance through AMTA. I see that many massage therapist choose to practice without being incorporated, so am wondering if the professional insurance would be enough protection. I spoke with my accountant; he is against it but he gets paid more if I keep the corporation, so am looking for a neutral person to advise me.
Asked on July 19, 2013 under Business Law, Maryland
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
How much would you save by not being a corporation--and is it worth the risk? Without a corporation--that is, practing solely in your own name--you do run the risk of a personal judgment against you if
1) you are sued for something covered by your insurance (e.g. injury to a client) and any of the following occur: a) the award exceeds the insurance (you'd be responsible for any extra); b) you somehow let the insurance lapse (e.g. missed a payment) or the insurance was otherwise cancelled at the time of the injury; or c) the insurer can make the case you violated your obligations, such as by not sufficiently cooperating.
2) you are sued for something not covered by insurance--such as by your landlord, for nonpayment of rent; by a contractor for work he/she did, or a supplier for goods sold to you; by a bank for any loan to the business; etc.
Personally, I believe that incurring these risks--especially 2) above, which is very broad-ranging--exceed the cost of the corporate structure, but you need to decide for yourself.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.