LLC or sole proprietorship

[soundmasterdj]

Stay the course as sole proprietorship or move on to LLC. Your thoughts and advice are welcomed please.

[robertbenda]

Do you have anything to protect? Assets (home, 401K, etc.) or a family to shield? If so, LLC. If not, you can get by with sole proprietorship for a while longer.

[Steve Lynch]

You should incorporate as an S corp or C corp. Find a good accountant.

The LLC has lost most of it's power in the last decade. If you think that an LLC shields your personal assets from liability, you're incorrect. It's incredibly simple to pierce an LLC in most states now if someone wants to come after you. especially if it's not set up properly.

An LLC is low maintenance, and simple to set up, which is why many people do it. As long as no one ever sues you it's adequate. However.... if you get a situation where (god forbid) you fatally injured someone, Burnt a place down, damaged property, or something like that, you'd quickly find out that someone could potentially wipe you and your personal assets off the face of the map.

It's a bit more work to Incorporate, but the benefits are many.

Being a truly autonomous financial entity, of which you are simply an employee, or officer, it cannot be attached to personal assets at all under any circumstances.

There are many other things you can do to reduce or eliminate tax liability as well.

Incorporate in a state with no corporate taxes, or purchase a small home in a state like Florida with no income taxes, and other such gems I learned.

Also, banks will often give you corporate credit, while with an LLC or sole Prop, they will not. When we incorporated a few years ago, we were handed a $100,000 open line of credit. 6 Months before when I was an LLC, they wouldn't give me a $15,000 loan, and I have an 810 credit score, and own 4 properties outright.

it's all a big game.

[dj_kevin_f]

We are an S-Corp.

[DJSTEVEZ]

You should incorporate as an S corp or C corp. Find a good accountant...There are many other things you can do to reduce or eliminate tax liability as well.

More Gold & Pearls from an authority who's beyond reproach. Some have to go to business school to learn this while others through difficult experience. Steve is a generous soul who's giving away for free. Here's some additional info courtesy of Legal Zoom.