The other reason frequently cited is naming. This isn’t the best reason as a D/B/A (doing business as) filing is often better and cheaper.

The downsides to a Corporation are the costs involved and need to comply with regulation. An often hidden downside is the loss of the ability to represent yourself. A corporation almost always will need a lawyer and cannot be represented by a corporate officer. Some state small claims courts will allow it however. So defending your corporation could end up costing you more then the assets in it. Then in some states the procedure is to ask to pierce the corporate veil after a judgement so you be unable to retry the merits of the case.

So what is the best protection for an SEO or internet service provider? A well-drafted contract and good service. Because of the nature of the business with clients all over it becomes very important to include a prominent forum selection clause with a provision that a party suing in the wrong forum will pay the fees necessary to have the case dismissed in the wrong forum. A provision limiting any damages to the amount of the contracted services plus reasonable interest would provide a lot of protection. What should be included varies from jurisdiction to jurisdiction and I encourage you to consult a lawyer in your own jurisdiction and this article is provided for general information and is not tailored from state to state. SEO and internet marketing services are greatly in demand among legal professionals so most SEO professionals can probably find a local lawyer who will barter SEO services for a well drafted contract.

Finally, this article should not be taken as disparaging the corporate entity, it’s a great tool. Once you find yourself selling the services of others you should absolutely consider a limited liability entity or when the corporation will be selling assets such as software licenses. Just be careful that your corporation always has a realistic present ability and intent to perform a contract on which you are the signing officer.

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