I'm working on starting the business officially. Does anyone have recommendations on whether the business should it be a Sole Proprietorship or an LLC?
check out the cake decorating business section here, there are tons of advice and suggestions.
Here's the link!
http://www.cakecentral.com/cake-decorating-forum-18.html
I think you should go with LLC, but I would get ligal adviser.
I vote for LLC, since I was a Sole Prop for a while, then changed over to an LLC. I basically had to all the paperwork again, so it would be easier to just go that way from the beginning.
When I went to the Small Business Assoc, I was all into incorporating. He said sole proprietor--my sister was in business (not caking) for about 15 years before she incorporated. It seems most of us do LLC from the get go now but I was advised against it initially then change over later after you get all the tax breaks. So another view fwiw.
As my attorney explained it to me.....
LLC - let's say you get hit by a bus, you're in the hospital for surgery, you have months of recuperating, and you have to close your business. Because you haven't worked in months, there are financial difficulties to work thru. The bank that holds the lein on your equipment can take the equipment, of course. But you owe $10,000 on equipment that has a used-resale value of $3000 (there's a recession ya know!).
With a sole proprietorship, the bank can 'cross the business line' and try to get the rest of their money thru your personal assets. With an LLC, there is a barrier between you-the-business and you-the-person.
The LLC protects you, your home, your car, your other household income, etc.
It costs minimal to do the LLC, it's not any harder to keep the books for it. I started as a sole prop simply because I didn't know any better. Having been an LLC for awhile, I'd never do a business any other way. Ever.
so basically there's a LOT more protection being an LLC if you get sued or can't work! seems like the way to go then!
I think for me it's $40.00 flat out all together to be sole proprietor and $200.00 for LLC...not sure if that was a one time thing or yearly though.
Most states will charge you a " filing fee" for your LLC annual report. Ours is $400. LLC is a nice hybrid between sole propietership/partenrship and a corporations. You can still file the simpler tax forms, but get the ersonal protection of a corporate structure.
I vote for LLC, since I was a Sole Prop for a while, then changed over to an LLC. I basically had to all the paperwork again, so it would be easier to just go that way from the beginning.
Yeap that is correct as an LLC you can just add on employees too without having to change anything
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