Do I need to have an LLC first?

9 replies
Greetings,

I am trying to creates some websites that will hopefully generate some cash. Would it makes sense to first create an LLC or just act as a sole proprietorship?


Furthermore, if i start making some serious money, how difficult is it to transfer everything (bank accounts, web domains, hosting, etc...) from sole to LLC?

Any feedback suggestions is appreciate, thanks
#llc
  • Profile picture of the author Joseph Robinson
    Banned
    I've been operating as a sole proprietorship (with both my writing service and affiliate marketing efforts) so it isn't necessary for you to have an LLC to get started. From what others have said it can be very beneficial to do so though (in the form of tax breaks and other things).

    As far as the difficulty of transferring, I wouldn't know. I'm not past the "putting out feelers" stage of creating an LLC myself.
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  • Profile picture of the author michaelgee123
    I know in my other business of real estate an LLC is a huge benefit regarding taxes but that would be an interesting thread if someone listed some of the benefits for an LLC in IM.
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  • Profile picture of the author jamesrich1
    I do not see a need for it starting off in your internet marketing business. Make some money first and then consult an expert.
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  • Profile picture of the author Raindance
    LLC isn't much required in Affiliate Marketing because the vendor websites allow anyone and everyone to become their affiliates. Although if you want to get into drop shipping, you might want to register one. Some suppliers/wholesalers insist on doing business with only registered firms.

    I don't know about the transfers though. I guess you just make a new bank account on the name of your LLC, and you can edit your information with the domain/host anytime.
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  • Profile picture of the author kindsvater
    Starting out, with little cash, a sole proprietor is probably best. Later, if you create a LLC transferring property is as simple as a contract between yourself and your LLC, and then modifying the contact information in your accounts.

    .
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    • Profile picture of the author SkillDan
      If you're just starting out, it really doesn't make a whole lot of difference whether you are an LLC or a sole proprieter. Why? Because you are taxed the same way (LLC earnings flow through at your individual tax rate).

      That stated...an LLC will provide you with some level of legal and/or asset protection. Plus, it gains you some level of respectability in the eyes of some partners.

      If you choose to set up an LLC, you should NOT need to hire a lawyer and do a bunch of expensive paperwork. I think most states will let you do it online. Go to your state's "Secretary of State" website and follow the prompts for setting up a business entity.

      In the state where I live, you can do it all online in 15 minutes and it costs $50.

      All that stated, I am NOT an attorney, NOR am I an accountant. You should check with both before proceeding.

      Good luck!
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      • Profile picture of the author kindsvater
        Originally Posted by SkillDan View Post

        That stated...an LLC will provide you with some level of legal and/or asset protection.
        No - not generally when you are still the "sole" person running the business.

        If you are a sole proprietor and do something illegal, then you get sued and your personal assets are at risk.

        If you incorporate or create LLC and do the same thing, then you AND your business get sued. Both your personal assets and business assets are at risk.

        For most Warriors the idea of liability shield / asset protection is a major myth.

        Whenever the FTC files a lawsuit, my law office files a lawsuit, or any competent attorney files a claim, the business AND involved individuals are named as defendants.

        On the other hand, if you incorporate / LLC and someone else in your business makes a mistake, then you may have personal protection.

        .
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  • Profile picture of the author J Bold
    It doesn't have to be an LLC, you might find another corp type fits your needs.

    Best to ask an accountant or business consultant yourself.
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  • Profile picture of the author RedShifted
    Agree with all the other comments. When I started my own business I first waited to make sure I could sell jobs and get some money in my account (this is for offline not online). I waited about 1 1/2 months then decided it was time to get an LLC and did.

    Still, for what you are doing, just creating monetized websites, I'm not sure you even need an LLC tbo.

    -Red
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