"Are you incorporated"?

I’m pretty new to the field of consulting and I’m negotiating with this dude who just popped that question via e-mail. What does “incorporated” mean in the context of web consulting??

Means you have filed with your local authority (whoever grants it) for Corporate Status (or equivalent).

You can put “, Inc.” after your company name, you must file corporate taxes, you are not necessarily personally liable if something goes wrong, etc.

Basically, if you are doing business in some form or another you want to consider incorporation or some of the other options :slight_smile:

For a little more information about incorporating and other business setups, take a look at this nifty article: http://www.ecommercebase.com/article/774/

One thing not mentioned in that article that is probably the best one for you is LLC.

It stands for Limited Liability Company (although the actual name varies from state to state) its a rather new business form that was created to help spur small business growth. Basically for tax purposes you treat it like a sole proprietor but for liability you treat it like a corporation. In general you’re getting the best of both worlds.

Bizfilings.com has alot of general information and state specific information on business types.

Additionally you’ll want to consult with an accountant. Usually the initial consult is free so you have nothing to lose.

I know what incorporated means…just wondering why a guy looking for help designing a website wants to know. Oh well. I told him how much I charge and he stopped the corespondence. He was one of those consulting agency people. They’ve been screwing people over and lying to developers even during the heyday of web design. I can only imagine what blood-thirsty mob of scavengers they had become now.

Anyway, I have been interviewed by a most interesting company that’s doing extremely well in these difficult times (in terms of finances). I won’t tell the name but they work hard on…putting web designers out of business.


Those folks work on increasingly sophisticated automated applications that allow people like my mom or even some redneck from a trailer park to build an e-commerce-enabled site without knowledge of even HTML.

I ran into the first well-done automatic website builders about a year and a half ago. The technology is improving constantly. Not very good news to our employment security, if I may say so.

I believe in a few years Microsoft or another major firm will release a CD-based “website creator” that will be so good and so amazingly flexible and intelligent that we’ll be finished once and for all.

Your business is now its own entity, or identity, or “person”.


Incorporating is generally not neccessary unless you need the liability protection it can provide or have several partners that want to remain independant of the company.

In many one-owner cases, incorporations do not work well on limiting liability. The reason is because many one-person corps don’t file the neccessary paperwork and do everything required. Also, if you don’t have much personal credit your business won’t have much credit… so you’ll have to personally guarantee loans and debts which makes having a s-corp useless.

If you have investors or have several partners… you might want to think about incorporating. If you’re just starting out I’d suggest just becoming a sole-proprietership until you’ve grown a bit.