Sole Proprietor or LLC

[eyebright]

Okay, so I am in the middle of doing paperwork to start selling and on the formed it ask if the business will be LLC, Sole proprietor and among other things. I'm stumped and would to know what others have used and your opinions. roblem:

I'm from Seattle, WA if anyone would like to chimed in.

 

[MOGal70]

Try this link.

http://access.wa.gov/topics/business/startbusiness/determinestructure

 

[meeplesoap]

Depending on your state, there can be significantly more cost to creating an LLC - in California for example, it's $800 a year, plus the cost of startup (around $300.) Not to mention an LLC will not protect your assets if it's shown that the majority of operating income (or startup cost, I can't remember which) comes from your personal monies, and your officers must be actual officers of the company, not just your neighbor or family member who really has no say.

If you're seriously considering an LLC, ask yourself if you have enough business in the pipe for the year to justify the increased expenses, then consult a lawyer to fully understand the ramifications. Otherwise, shoot for a sole prop for the first year, then reevaluate after. HTH!

 

[KateInBrightPlaces]

I recently took a class at the local Small Business Center titled Foundations of Small Business, and the teacher went over the different business structures in detail. What he told us, and what he made a very strong case for, was that hardly ANY small businesses should register as anything other than an LLC. He said that if your business deals with people, in any way you have liability on your hands. And with bath and body products, you absolutely are dealing with people, and in a very intimate way. It's important to protect your business and yourself, and LLC registration is one way to do that. So that's definitely my vote. (And what I did myself just recently in Oregon. If you have any questions about my experience, feel free to ask or PM me.)

Good luck!

 

[Moody Glenn]

I certainly agree with KateInBrightPlaces. I debated about going at it as Sole or LLC. I first asked my local bank manager and he said the same thing as Kate mentioned. I was unsure how to form a LLC so I asked a lawyer in a law firm I had some work done years ago and he signed me up that afternoon. There is a little more work to be done but you do have some peace of mind. Go with a LLC.

PS: It does not mean you can go without insurance though. My lawyer said having insurance helps prove you are very serious about protecting your business.

 

[Kersten]

I'm with KateInBrightPlaces and Moody Glenn on this one. I was advised the same by a two friends who are very knowledgeable on the subject. I didn't want to fork-over the money for someone to process the paperwork for me, so I did it myself. I took a bit of research and conversations with those "in the know", but I got all the paperwork filed for a few hundred dollars in fees. In Texas there are no additional fees like there is in California and some other states. It is a pretty new business model, though, so I found at tax time it was hard finding anyone to work my taxes (I don't have a CPA yet), so I had to do them myself :-( It was not fun, but the HR Block guy that did the final filing offered me a job after he saw my work, LOL! I politely declined ;-)