I am currently licensed as a sole proprietor, but thinking, for liability purposes, I should maybe change to an LLC. Anyone have experience or input on this? I cater and bake. I am licensed and insured, approved by health dept, etc. Very small business.
Do you have any employees?
Is there a specific reason to change?
for some LLC you need a corporate seal. Do you have one?
No employees. No real need to change except the very outside chance (I hope) of being sued. I hope to start selling on the internet, and that is what has spurred me to consider this. I hate to because I know there are rules about bookkeeping, ( I do mine on quickbooks, am totally honest and diligent) but I often pull money from business account and put in personal account and visa versa. I understand this is a no-no with an LLC. I'd have to be much stricter with myself and don't really want to have to.
First, if this is an issue that you really want to get right, you should consult an attorney. I know it can feel expensive, but you are much more likely to end up making what will be the best decision for you (and potentially saving yourself money in the long run).
Second, the benefits and drawbacks of creating an LLC (including how much the annual cost to maintain it is--yes, you have to pay your state an annual fee) differ from state to state. If you type into Google your state name and "Secretary of State" you should be able to find your way to your state agency's applicable website. Some states put a good deal of helpful information online . . . some less.
But this should be pretty basic info (and relatively inexpensive in legal terms) to get from an attorney who has experience helping small businesses.
I am a registered stockbroker and am well versed in Organizational plans, which is the type of application you would need to complete.
I am not authorized to say who I work for and discuss these types of investments in a forum, I can mail you an application OR you can call me when I get back to work which is July 13th.
If you are interested please send me an IM. Also, please note I do NOT work for commissions.
Reviewing your state laws is always the first thing you should do. You learn alot and also will find out if you need an LLC or not. There are also sole propietor accounts that sole owners have established.
You need to assess your financial status in your business, if you feel that you need to go to a lawyer by all means they are there to assist you. However, please as about the fees in advance so you will have no surprises.
We have LLC companies that start small and some that are in the millions so there is always a happy medium.
Like I said if you need assistance I can help and the services are free. However, I will be leaving tonight and will not have access to a computer for a while. I will be returning to work on July 13th.
Go online and do research, there are Investment companies that give you free advise and can mail you brochures. It's always good to invest for the future.
thank you all, I appreciate your input.
Here's a thread where I share the over-simplified reasoning as my attorney explained it to me. http://cakecentral.com/cake-decorating-ftopict-683690-llc.html
states do differ in their requirements. For example, in my state I did not require a company seal, nor was there any kind of annual fee. I've read on here a few times about "additional costs to maintain" an LLC and I've no idea what they're talking about because I had no add'l costs, annual fees or anything. It doesn't matter if you have employees or not ..... it's the corporate protection you're after.
Should I ever start up another business (something that's always on the back burner and makes my husband shudder! ), I would never be a sole proprietor ever again .... it would be LLC all the way. Always.
Oh, and while I understand it's possible to download forms and do the LLC stuff yourself, I strongly encourage having an attorney set it up. With my attorney handling it all, I knew nothing fell thru the cracks, all the name searches were done, all necessary paperwork was filed properly, etc. I didn't have to guess my way thru it.
In the words of Martha Stewart (and whether you like her or not, the woman is a freakin' BILLION-aire, so I tend to pay attention!), "If you think you're going to save money at the front end by NOT talking to an attorney first, you're just going to pay for it at the back end."
Good advice. Just a feeling.........I hate worrying and I think I'd worry less if I set up an LLC.
I am licensed as a sole also. I rent a commercial kitchen so don't have any real property of the business. My hubby (who is an attorney) recommended that when I do open a shop I should incorporate.
I would agree, talk to an attorney and get advice before making the decision. Then, if you go ahead, definitely have the attorney do the paperwork. It'll be a load off your shoulders that it's done right.
I'm the odd gal out, but I'm an S Corp and love it. Very flexible and easy to set up. Easier than the LLC.