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Do you register your IM as a business with your state?

by yaji
10 replies
Is it necessary? I know it'll protect your personal property but I wnated to know in reality how many IM starters (meaning earning less than $1000 a year) actually register their IM business with the state--- that translates to "waste" about $200 a year for the registration fee.

What are the real risk not registering it as a business? Do you actually register it with your state? Thanks.
#business #register #state
  • Profile picture of the author yaji
    Any thoughts?
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    Thanks, Yaji

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  • Profile picture of the author Leonard Holmes
    I have an LLC that is registered with my state. As long as I keep the business finances separate from my personal finances it protects me and my family from anyone who sues the company. That's part of the value - protection of your personal assets.
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  • Profile picture of the author kayelex
    I assume you are talking about incorporating? Just registering a business, in some states, is just a matter of going down to the court house and getting a Doing Business As form. They cost about $15 here and that gives you the ability to go open a bank account in that name. But, you are operating as a sole owner in that case.

    To incorporate is a more involved process and does have asset protection and tax benefits that I am not qualified to elaborate on. I would think everyone would want to get to that point, but it can be a big expense for some people
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    • Profile picture of the author definitive
      I haven't bothered to do it, but all the tax write off's at the end of the year should cover a lot more then the registration fee's. I would assume anyways
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  • Profile picture of the author VipulShah
    I heard that registering for an LLC for your IM business is a must to prevent any tax complications.

    But I would think only if you start receiving multiple, high income streams from many sources where it would be difficult to track....would you agree?
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  • Profile picture of the author Dan Grossman
    There's virtually no difference in how you file taxes as a single member LLC versus a sole proprietor (just operating under your own name). You don't need a "business" for any of the tax benefits of doing business. Not any that an LLC would get you, there are benefits to S-corps and C-corps given enough income.

    I have an LLC for two reasons, liability protection (but you have to be very careful about how you run the business to get that, it's very easy to go after you personally if you don't), and because other businesses are less likely to purchase expensive services from "Dan's Website", at least in my opinion.
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  • Profile picture of the author yaji
    Great inputs, much appreciated. So the consensus is, to protect your personal assets, plus give you a more professional looking, and no need to give out your SSN to do business, if you register as a business with the state. Tax-wise, there should be no differences whether you register or not.
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    Thanks, Yaji

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  • Profile picture of the author James Schramko
    If you don't plan to make $1000 a year why are you doing it?

    "Start as you wish to continue"
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  • Profile picture of the author VipulShah
    I like the security of having liability protection with an LLC.
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    • Profile picture of the author jboyd
      I registered the business as an LLC ($600) and have $1,000,000 of liability insurance ($500). I keep the company finances completely separate from my personal. All of this effort is to protect mine and my wife's assets.

      But then again, I sell things with fire and electricity in them. If you spend a little $ on legal counsel, you might be able to disclaimer your efforts with tick boxes that keep customers from purchasing unless they agree to terms and conditions.

      You state less than $1000/Yr. If that is your goal for all time, it is a hobby and needs no legal form or elaborations, but if you have higher aspirations, treat it like a fortune 500 and give it titles and place it on a pedestal.

      Good Luck,
      Jay
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