Is it wise when starting a business of 3 people to incorporate?

MYSELF AND TWO WOMEN ARE THINKING ABOUT STARTING A CORPORATION WHERE WE INVEST IN PROPERTY, I SUGGESTED THAT WE INCORPORATE, DOES THIS PROTECT US ON AN INDIVIDUAL BASIS.

Incorporation is a very popular form for people who are seeking the protection of your personal assets. The rules for incorporation vary by state but can be very simple in some cases. One of the drawbacks is that the corporation itself is considered an "individual" and will have to pay taxes. You will also be taxed on any profits you draw from the corporation. You will often hear this described as "double taxation". One way around this is to form a Sub-chapter S corporation which does not pay tax at the corporate level and the shareholders are taxed at their individual tax rates on profits. The basic requirement to be considered a Sub S is there has to be a limited # of shareholders. In your case, 3 is well below the max.

There are other ways you can set up a business that limits you liability without the incorporation route. One example is a Limited Liability Company (LLC) You may see this designation for allot of law or CPA firms. This is similar to a partnership but with the liability protection.

Talk to your Accountant or Legal adviser for which is best for you and good luck.

Absolutely!
You'll be having "shares" in the company, and as a result, earnings/profits will be split accordingly.

Also important, is your company's charter, which you all agree on at the outset which direction your company will take. These all help handle some of the friction that may or rather "will" arise at a later date.

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