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Sole Proprietorship, Corporation, LLC? - Business Lesson Please

by Woody C
9 replies
Last night I was reading a few resources on internet marketing and a couple of them said to set up businesses before getting started. Period.

I feel that I am like a lot of fellow Warriors that thought I'd just create a product (or numerous products) and sell them to put lots of money in my bank account.

I also know that having a business is better for tax purposes and also using advertising (PPC, website domain purchases, etc) and other resources as business expenses.

Where do I start?

LLC, S Corporation, C Corporation, Sole Proprietoship is all Greek to me. I have never worked with a lawyer before. Do I even need one if I am just getting started?

Would you recommend making some money in IM before creating a business?

Is it best to make up to $1000 first by yourself then spend that money to create a business? Would you recommend creating your business then start spending business money to start?

All the products advertise that you can make lots of money with little work, but they don't tell you how to protect your expenses, etc.

Thank you for all the help.

PS... I currently live in one state, but I am moving to another state in August. Does it really matter in what state you create your business and where you live?
#business #corporation #lesson #llc #proprietorship #sole
  • Profile picture of the author LB
    Talk to a lawyer and/or accountant.


    (because that's where these threads always end up AND it's the right answer)
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  • Profile picture of the author Rus Sells
    Corporation all the way, it offers more protection then an LLC if you ever get sued. That is not to say that the corporate veil can not be pierced it's just harder to do.
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  • Profile picture of the author Droopy Dawg
    Soome good info here. But I'd also recommend talking to a lawyer.

    How do you know whether a corporation or LLC is right for your business?

    Let's assume that you've concluded it would be advantageous to operate your small business through an entity that limits the personal liability of all the owners -- even if following this strategy involves a bit more paperwork, complexity and possible expense. You have two main choices -- either the tried and true corporation or the new and streamlined limited liability company (LLC). Which is better? There's no answer to this question that applies to every business. Nevertheless, some general principles may be helpful.

    Read the rest here --> Corporations vs. LLCs
    Hope this helps,

    DeShon
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  • Profile picture of the author Woody C
    If these types of threads eventually come to "just go see a lawyer" then what type of lawyer?

    Are there small business lawyers?

    How would I come about finding a specific type?

    I search for a thread like this and couldn't find one. Thank you for all the replies.
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  • Profile picture of the author Woody C
    Done and done.

    I researched Small Business Lawyers on Google and found some good sites.

    I would find it interesting to poll Warriors to see how many have Corporation vs LLC vs Nothing. I bet Nothing would win.

    Thanks.
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  • Profile picture of the author Droopy Dawg
    SCORE is another great place to visit if you have questions about starting a business... check them out here:

    score.org
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  • Profile picture of the author artwebster
    Forget lawyers - they will advise you in their own best interest.

    Consult your local tax office. It's free and they know more tricks and allowances than any accountant or lawyer - after all, they are the experts.

    Make an appointment and put the hypothetical question.

    There are more advantages to being a sole trader than there will ever be in creating a Corporate body which will need its own identity, its own tax calculations, be audited as a matter of routine and which will be your employer.

    If you really think you are likely to be sued you need to take out public liability insurance.

    The real question is "Do you want to be self employed or do you want to be an employee?"
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    You might not like what I say - but I believe it.
    Build it, make money, then build some more
    Some old school smarts would help - and here's to Rob Toth for his help. Bloody good stuff, even the freebies!

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    • Profile picture of the author Tsnyder
      Originally Posted by artwebster View Post

      Forget lawyers - they will advise you in their own best interest.

      Consult your local tax office. It's free and they know more tricks and allowances than any accountant or lawyer - after all, they are the experts.

      Make an appointment and put the hypothetical question.

      There are more advantages to being a sole trader than there will ever be in creating a Corporate body which will need its own identity, its own tax calculations, be audited as a matter of routine and which will be your employer.

      If you really think you are likely to be sued you need to take out public liability insurance.

      The real question is "Do you want to be self employed or do you want to be an employee?"
      That may be true where you live but in the U.S. the last place
      I'd go for tax or business advice would be the IRS.

      A good business tax accountant is the place to start.

      Tsnyder
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      If you knew what I know you'd be doing what I do...
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