1. $200 is what it costs if you do it yourself, $1000 with the help of an attorney and accountant.
2. What's a lot? Losing even a $100K house is devastating. Having a failed business's creditors take away everything because a customer fails to pay a bill in a timely manner and causes a cascade of failed bill payments from the business is crazy... which is the main reason you incorporate - routine business risks are... riskier than most people's personal life.
Limited liability is a tool for everyone and I would argue matters more the less wealthy you are. I say that having started four businesses, with about a month worth of operating cash... Started three part time on the side, and without the corporation self-employment tax alone would have crushed the business, let alone a lawsuit against my family because of a routine business issue. It also helps in reverse - a financial problem a partner in a small business has generally is not able to reach through the business to take assets from the company. It might change who the owners are, but it doesn not allow people to reach through to the business.
> Having a failed business's creditors take away everything because a customer fails to pay a bill in a timely manner and causes a cascade of failed bill payments from the business is crazy... which is the main reason you incorporate - routine business risks are... riskier than most people's personal life.
Bills and other debts can be subject to limited liability when the other party explicitly agrees to it.
My point was that damages to 3rd parties who didn't agree to the conditions of limited liability, like people affected by hazardous chemicals(see https://en.wikipedia.org/wiki/Bhopal_disaster), unsound structures, unsafe workplaces, environmental damage and so on should not be denied restitution because of limited liability. Neither should the taxpayers pick up the tab in such cases.
Being poor — or indeed normal —means not having $200 to spare on making yourself resistant to bankruptcy. Tech workers like us are much richer than most: I started on my country’s national lifetime average salary, and most recruiters now expect me to ask for double the local national lifetime average.
Plenty of normal people incorporate... It isn't about resistance to bankruptcy... It is about avoiding a whole swath of life altering problems that a corporation prevents.
It is not true for everywhere in the world: often in lower income countries it is often far less expensive to incorporate. The legal protections vary, too.
2. What's a lot? Losing even a $100K house is devastating. Having a failed business's creditors take away everything because a customer fails to pay a bill in a timely manner and causes a cascade of failed bill payments from the business is crazy... which is the main reason you incorporate - routine business risks are... riskier than most people's personal life.
Limited liability is a tool for everyone and I would argue matters more the less wealthy you are. I say that having started four businesses, with about a month worth of operating cash... Started three part time on the side, and without the corporation self-employment tax alone would have crushed the business, let alone a lawsuit against my family because of a routine business issue. It also helps in reverse - a financial problem a partner in a small business has generally is not able to reach through the business to take assets from the company. It might change who the owners are, but it doesn not allow people to reach through to the business.
These are not issues of the rich.