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Originally Posted by Marc
The main gain of one person incorporating is to limit liability. Considering you are mainly looking at auditing and doing some courses, liability shouldn't be much of an issue if any.
I would check with the registrar you do contract work for and ask them about their position with respect to liability.
For those reading this thread, are any of you one person corporations?
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As Marc writes, Liability is one issue - not the only issue. If you make an error, the "corporate veil" can be pierced, so buy liability insurance - SHOP FOR IT TO GET BEST VALUE.
The primary reason most folks create "one person corporations" has to do with tax advantages and buying various types of insurance. It is smart, for example, to have a separate bank account and credit card for the corporation.
Many organizations which hire folks to come in and do work as consultants or contractors prefer to write checks to corporations rather than individuals to ensure freedom from filing US 1099 tax forms.
A resource you should look at is
Contract Employee's Handbook
http://www.cehandbook.com
(Note - I am acquainted with Jim Ziegler, the author. He also runs a sort of "umbrella corporation" aimed at helping independent contractors avoid the gouging of some agencies they are forced to deal with. I am not recommending joining Jim's organization, that's a decision you need to make in conjunction with your own tax advisor. However, the information contained in the handbook is helpful, even if it does have a certain bias.)
As a government retiree, you will probably have the advantage of low or no cost health insurance for yourself. That will give you a big boost in avoiding costs. Others without such a safety net may find it helps to shop for such insurance with a corporation rather than as an individual.
If and when you decide to hire part-time or full employees to help you, things are MUCH smoother with a corporation than as an individual or sole proprietor.
If and when you ultimately decide to retire, the corporation may have a sale value for the "good will" you have built up.
Note this important fact above all others:
There is a difference between "replacing a job" and "creating a business." If you have an entrepreneurial bent and wish to take on associates and apprentices to help you expand business as your reputation grows, you will find it easier to do as a corporation, regardless if you are the sole owner of the stock and comprise ALL the corporate officers.
Over a lifetime, I've owned several "one man corporations" for various reasons. Mostly, the primary reason was to facilitate resale of the business which could be accomplished by a mere transfer of stock rather than a sale of individual assets, thus avoiding a lot of transfer taxes that some governmental jurisdictions insist on placing on everything from real estate transfer to vehicle transfer, when individuals transfer title to such property. When I have had employees who could be groomed to buy the business, it was easy to accomplish with a corporation.
Income tax laws change frequently. Almost everyone has a different situation. Please consult a competent tax advisor for YOUR particular situation before proceeding.
Jennifer's idea of going to SCORE (retired executives to help plot your business plan) is an excellent and low cost first step.
Advantages of Single Person Incorporation - Any advantages?
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