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Topic Sole Proprieter or LLC Go to previous topic Go to next topic Go to higher level

By MoBo On 03/25/04  

I'm about to file for a business liscence and I was going to file as a LLC so that my savings account couldn't be affected in case I'm ever sued, but now I'm wondering if I should file as a sole proprietership and incorporate later if I still want to. Has anyone had any experiences as to whether or not a LLC is better for a small business? I don't think there would be much cause for me to be sued, but you never know.



By funkyutopia On 03/26/04  

i found that filing sole proprieter was better for me. i've been told that in order to incorporate here in my area would be more cost than it was worth. but i didn't look into it too much. knowing a tad bit about what you are about to venture into, i'd have to say you have very little worries about being sued.

when you start out make sure you are legit, but keep your costs low so you can concentrate on growing your business in the future. sometimes it is a good idea to have a seperate checking account set up for your business. it was very simple for me to add another account with my current bank and it didn't cost a thing. just had to show my business license. that way too, when you are buying supplies you can keep that seperate from your regular expenses. it makes things a little bit easier when tax time comes around, too.



By swank On 03/26/04  

you might want to consult an attorney about your current risk and on when it makes sense for you to file as a corporation rather than a sole proprietor. generally the first consulting session is free so you shouldn't have to shell out any money to get that advice and then you have a reference point on whether you would like to use that attorney down the road. consulting an accountant could also be beneficial as he or she can advise on tax implications.

if you're just starting out, this could be a large expense that isn't necessary right away. also, when you are ready to switch from being a sole proprietor, i would suggest looking into an S-Corp as well as the LLC - a lot of times the LLC can end up costing you more to set up.

finally, when you're a small business, you should be aware that your personal assests are not necessarily fully protected by being a corporation. it does provide some level of protection, but in speaking with my attorney and accountant, i discovered that you do generally still have some personal financial exposure. so, it's not a cure-all to have the corporation status. again, i would really recommend a meeting with an attorney to discuss your particular situation.



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