Cake Gurus... Are You Sole Prop? Partnership? C-Corp,s.corp?

Business By Cakenicing4u Updated 8 Jul 2008 , 4:41pm by taxnerd

Cakenicing4u Posted 8 Jul 2008 , 12:31am
post #1 of 5

I just got off the phone with the first step teleconference with the local small business development center... and I've been taking the course on legal and I can't seem to figure out what legal form is best for Cake bakers! Sole seems like the way to go, since it's just me myself and I.... but C corp and S corp and LLC have me confused.... so I ask....

What are you?

4 replies
sandygirl Posted 8 Jul 2008 , 12:58am
post #2 of 5

I do not have a bakery but I am from the accounting/management world. Sole is probably fine, the LLC is what I would consider for myself if I ever when into business. In a nutshell the LLC seperates you and your personal finances from the business. For example, if you personally went bankrupt, the shop would be safe or vice versa. The drawback is that there are more taxes and paperwork. (But like I said I am from that world, and do those everyday anyway. A lot of people go with sole to avoid all that hassle)

The S-corp and C-corp involves shares between partners among other things and since you are the one and only, this would probably be a little over the top. You can change the type of business you have rather quickly, so when you open up your 2nd or 3rd bakery then you might want to look at these options.


littlecake Posted 8 Jul 2008 , 1:15am
post #3 of 5

not a guru...


i was an s tired of all the paperwork, now i'm a sole pro.

s corp protects all your personal assets, but (for me) i figgered the sue happy peeps were usually after the big boys with deep pockets.

indydebi Posted 8 Jul 2008 , 3:59am
post #4 of 5

Started as sole prpprietor ... am now an LLC. No extra paperwork for me at the operations level. Just some paperwork that needed filed and my attorney handled that. The accounting stuff is handled by my CPA. I personally don't do anything different.

taxnerd Posted 8 Jul 2008 , 4:41pm
post #5 of 5

I have a background in accounting and tax prep, but I've been doing cakes on the side for the last couple years. It's not really a business, but if it was, I'd probably go for the LLC. I don't know very much about the difference in liability limitations for the LLC vs. the corporation from the legal standpoint, but both offer more liability protection that the sole proprietorship, which is definitely a plus. From an accounting/tax standpoint, however, the LLC is the most flexible in that you get to choose how you are taxed. (In the case of one owner, an LLC can choose from sole proprietor, S-corporation, or C-corporation taxation.)

One word of caution since I see that you are also located in PA. PA requires all LLC's to file a "Corporate Tax Report" regardless of how they choose to be taxed.

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