LLC or sole-proprietor?

[Lynn Bodoni]

Hey all,

I'm looking to go into business for myself with my massage therapy training. I'm curious, tho, if I should create a business as a sole-propretor or file for an LLC? I know that LLCs provide extra security so that creditors can't go after your personal belongings, but I don't know if that would impose any structural problems. I mean, the business consists of just me and will be run out of my home.

Does anyone have any helpful advice in this area?

Thanks,
-v

 

[adiavoy]

You can try these few links until you get more people to reply.

To Incorporate or Not to Incorpate
http://www.massageplanet.com/forum/viewtopic.php?p=13440

Limited Liability Company
http://www.massageplanet.com/forum/viewtopic.php?p=11972

Business question
http://www.massageplanet.com/forum/viewtopic.php?p=10236

For those of you who own your businesses....
http://www.massageplanet.com/forum/viewtopic.php?p=7479

For Everyone...
http://www.massageplanet.com/forum/viewtopic.php?p=7411

Here is one of my posts from one of the above threads:

From what I know about LLC's, they are sometimes used in special situations when you can't set up a regular corporation.

A few things that may fall into considering LLC, versus PC, versus S-corp or C-corp, are things like how much money will the company be making, are all partners US citizens, do the partners practice the same type of business or different businesses,what will the sales of taxable items be like (I think this one is just something the accountant and lawyer need to know for tax purposes, but not sure about that)?

Not that any of these say you can or can't form the incorporated company, just that they are a few of the things that go into deciding what kind of letters the corporation gets behind it's name.

I am sure there are plenty of other considerations, but these are a few I am aware of.

A good atty in that line of business is a great way to find out for sure what you need. Also, the atty and the accountant will need to get together when the final decision is made, so that all paperwork is dealt with properly on both sides (from my experience)... so be prepared to be spending a little extra on that.

berkana,

thanks for the link!

May I add, that generally, unless you have a special circumstance where both parties are not US citizens, or aren't in the same profession, then I think you usually just take on an s-corp, which is "inc.". But, make sure and check that out with your atty. for your particular situation.

 

[anthony f]

Just want to clarify something here...

... as a sole proprietor, you can become incorporated, or you can get a DBA ('doing business as'). From the sound of your question --- it seems like you are using the word sole proprietor unanimous with DBA. Could you clarify that for everyone, now that silence in the mist has made such a good point?

 

[sunshine11]

Answers and Questions

Thanks for the replies so far, folks!

Actually, the DBA (doing business as) is just if I want to use a name other than my own for my business, I think.

I have contacted my home insurance and actually, all they needed was a very small increase in my insurance premium -- no inspector or anything, thank god.

So the LLC is really only worthwhile if you're working in tandem with someone else? That's good to know. I'm still going to check with a lawyer, but I wanted to hear what other people have done.

Thanks!

 

[Fonz]

Answers and Questions

Actually, the DBA (doing business as) is just if I want to use a name other than my own for my business, I think.

So the LLC is really only worthwhile if you're working in tandem with someone else? That's good to know. I'm still going to check with a lawyer, but I wanted to hear what other people have done.

Thanks!

DBA you can use as your "personal name" (Jane Doe) or as a "specific name other than your personal". (Healing Hands)

LLC as I mentioned earlier, is basically used if you work with someone who has a different type of business than you (Naturpoathic Doctor and a Massage Therapist) or if the person is not a US citizen (US and Argentina)... and I think there may be some other specific reasons. Basically, if two MT's are working together... you'd most likely use a s-corp.

Hope that makes more sense.

 

[Adnan Sallam]

I would consult with a tax person about it. I did, and found that it makes good financial sense to become an LLC for me - the pay off hits at a certain gross income level. Even if you are an LLC, you can still file as a sole proprietor. I'm meeting with my tax guy in January & we are crunching the numbers to see which is more advaneforum.xxxeous for this first year.

Anyway, places like H&R Block, etc have small biz consultants that will give you a consultation (mine was scott-free), in hopes that you'll do your tax preparations with them. I learned alot in that free consultation.

Jill/Sagetherapist

 

[Ninja Genius]

don't forget that SCORE is free business advice from seasoned individuals in conjunction with the small business administration. look for them in your town.

 

[angel619]

I work for myself as well and I am a sole proprietor LLC. It was a good thing for me to do as well. It's what my account told me would be the best so I went with it. You don't have to have a partner or employees to be an LLC.