Naive Question

by Mohsen
(Dallas)

Greetings,

I would consider myself a business professional but am somewhat new to the concept of founding my own business which is what I am currently considering. My question is, can I establish my business, run it initially for a limited period of time, before incorporating? this would be in an effort to assess the viability and likelihood of success before investing substantial sums of cash into the incorporation.

Answer

Yes, you can run your business before incorporating.

However, understand that you can be held personally liable for pre-incorporation activities, contracts, etc.

You have to balance the risk and reward according to your own tastes/preferences.

Depending on the type of business you're running, incorporation expenses could be a large percentage of startup costs.

On the other hand, if you are starting up a business where you're planning on spending tens or hundreds of thousands getting up and running (such as a franchise), you really ought to incorporate from the beginning.