Should I incorporate?

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Thank you for reading my questions.
I am interested in starting a small internet/mail order business where the sales would be generated through auctions placed on sites such as Ebay. I would be selling a variety of items ranging from video games, toys, CD's, nick-nack type items etc...but I have heard and read many suggestions that a business should incorporate--probably as an "s" corporation. Obviously protection form personal-financial liability is the primary reason to incorporate, but my question is should I incorporate? Here are a few questions and potential scenarios which make me unsure as to whether or not I need to.
1)Does every business really need to Incorporate? I've seen the extensive paperwork involved in its setup--not to mention the costs involved to set one up with an attorney, but a small business can't even plan on making a profit for a while let alone put all that money into setting up a corporation.
3) When should the decision be made as to whether or not to incorporate? How and for what reasons, could I be "liable" or "potentially" liable once I start my internet/mail order business?
4))It also seems that nowadays anyone can be sued for any reason, and the more I think about what could happen, I don't know at what point I am considering ridiculous and unfounded possibilities to be sued for by a customer. Here are some scenarios:

** I sell a model kit to someone ( an adult because I would put a disclaimer in the ad stating "you must be over 18 or have your parents permission to purchase this item or to use a check or credit card") and that persons' child gets a hold of one of the parts and swallows it. Could they try and sue me because their child choked on it?
** I sell someone (an adult as per the disclaimer) a laser pointer-keychain, and even though the packages' "warning" clearly reads- "can cause severe eye damage if shined in the eye", and then someones eyesight is actually damaged because they didnt listen to the warning, can I be sued for this?
** I sell someone (an adult as per the disclaimer) a book on "How to plan the perfect Party or Wedding" and after they follow a suggestion in the book, their party is ruined. Can they turn around and sue me?
** I sell someone a toy and somehow their child gets it out of the packaging, breaks a piece off and chokes on it because they try to swallow it, can I be sued for this ?

I know these scenarios may be a bit extreme but I feel thay are valid concerns to think about, because I don't know if these possible lawsuits are justified. What rights and responsibilties do the seller and buyer have in these cases?

I know this Legal service is free advice, but I would really appreciate your professional input as to what I should do since I am at a road block and i do not know how to proceed with my plans.

Thank you for your time, and I eagerly await yor reply.

 

[Tracey]

This won't address all of your questions, but here goes.

You don't have to incorporate. I'll let the other capable attorneys advise you on whether you need to.

That said, incorporating doesn't have to be expensive. You can do all the paperwork VERY easily without a lawyer. I ran across a great book -- "Incorporate Your Business, the national corporation kit" and had legal forms on disk. It's by Dan Sitarz and published by Nova Pub. Their eddress is http://www.pma-online.org/list/1808.html

It had a simple explaination of the various forms of business (partnership, sole, s-corp) and instructions and checklists to follow. It gave me everything I needed to write Articles of Incorporation, Bylaws, Minutes, create stock cerificates, etc. It also tells you the year-to-year b.s. you have to go through to maintain your corporate status. It includes each state's laws.

It took me about 4 hours to read the book and cut and paste articles & bylaws together.

Good luck

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This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.

 

[I AM ALWAYS LIABLE]

Great response, Tracey. I would only add that the gentleman should check into obtaining and maintaining a liability insurance policy. In the event of a lawsuit, at least he'll have representation, and coverage in the event of a loss.

IAAL



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[Web Builder]

I'd incorporate just to keep your personal liability away from your business liability. If you do get sued, you don't want to lose your house, car, investments, etc.