Sole Proprietorship vs LLC
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- čas přidán 1. 07. 2024
- The sole proprietorship vs. LLC discussion often centers on business liabilities but your personal liabilities are just as important in the discussion.
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this guy clearly explains with simple English what to do .
This is very informative thank you. I want to start an at home business but who knew the tax part of it would be such a pain!
Thank you for this info Lee! You have no idea how much you have helped me out.
finally a good simple explanation. THANK YOU
You are a really great asset when it comes to starting a business. Glad i started with an LLC. Cheers.
This guy makes this stuff easy :)
Great information, Sir! I am really getting a lot out of your LLC videos! They are telling me exactly WHY I want to set my business up, that way. It's really a no-brainer, for small business. LLC... Best option in the tool box. Again, thank you!
Your advice was so clear and awesome, I had to like and subscribe. Thanks!
Awesome video! Very informative. You really helped me understand the difference.
Simple & straight to the point
Great video, It's clear and easy to understand !
Thank You Lee Great Video By The Way!
Great video Lee . Thanks
Great vid thanks for your time
I'm in virginia..ok LLC is the way to go.Much appreciated for advice
Thanks a lot for your help.
Thank you soo much i appreciate it.
Awesome video.. I subscribed!!
Thanks Lee...
thank you for the video
Thanks Lee
very informative video, thankyou for taking your time to make these videos. I am wanting to start a Auto Detailing business in WA state, i would be the only person for the time being and would go around and do mobile services at peoples homes etc. I am leaning to go with LLC, what would you recommend? I know theres high liability as clients vehicles are worth a good amount of money. Would appreciate your reply!!
Setting up an LLC in WA is not to difficult of a process with minimal costs so you could start out as an LLC. You may want to consider doing a bit of work first to see how viable your business will be before you form the LLC.
Thank you sir
Haleema's Botique, taxes are generally a pain, but if you set up your company and choose the proper taxation structure, you can save a lot more than if you don't. A little business can be your most effective, and legal, tax shelter.
I really enjoyed the video thanks my question is I am thinking of starting a window cleaning business which will be better for me to register with a sole proprietorship or LLC it will only be me in the business?
It depends on the state where you are going to be working. If the cost to register an LLC are high in your state, then you may want to start as a sole proprietorship till you start making steady income and then switch to an LLC. If the cost to form an LLC is low, then you may as well start as an LLC.
starting my own mobil mechanic business or doing just your common tuneup, repairs, maintenance on cars at home . I already got a dba account with my local bank as sole proprietary and started handing out business cards . with cars it's a toss up if someone wants to sue. should I get an llc or keep it as sole ? I just started. in az .
+diesel Torres It is fairly easy and cheap to get and maintain an LLC in AZ so it may be worth your time setting up an LLC. If you are making money then you can possibly also save on taxes with an LLC.
This was 👌
hi legal less I am a personal trainer looking start my own fitness gym under myself only.Been scratching my head on sole vs LLC as far as witch way to go. I've save my own money and brought my own equipment already
Great, great video! Still doing my research & I have been wondering this actually; If I want to start my own "tutoring business" which would you recommend?
If you are starting a more informal business it can be best to start as a sole proprietor and then as a the business grows you can change to a formal business entity like an LLC.
Thank you, I planned on that...now if I would like to scale on up on productivity pretty fast, (I could see this happening in maybe 2 mos or so maybe based on the need in my area?!) let's say I hire eh, 2 tutors at first...you recom still SP UNTIL we make some profit or just go ahead & go LLC without a profit first? I haven't launched but I have some requests already so I'm still looking into this as I type. Thank you for your time & your honest reply.
If you are going to be hiring employees it is usually best to start as an LLC and you will need to get an EIN number from the IRS.
Hi Lee, thank you for this video!! I;m about to start my business as an acupuncturist in California. I will have malpractice and liability insurance protecting me, of course. And I have few assets. So doo you think sole proprietorship would be sufficient for me for now, at least? Thanks!
In California you may want to start as a sole proprietorship because of the large cost of starting an LLC. Having insurance is a good start to protecting yourself. Eventually if you start making decent income from your business you may consider switching to an LLC so that you can take advantage of some of the tax savings an LLC can provide you with.
Great video thanks, I've always wondered whether I should be a sole proprietor or an LLC for my barber shop, your thoughts...
JIM DELIOS You can do both by setting up an LLC and having it taxed as a sole proprietorship. That way you get the corporate shield from the LLC and the simple tax structure of a sole proprietor.
Nice
I've seen multiple of your videos but still can't come to a clear answer. What about a general contractor in Wisconsin? What would be the best set up if he's the only owner.?
If you are going to be a general contractor you will probably want to set up an LLC to provide liability protection for yourself and to get potential tax savings by being taxed as an S-Corp.
What would recommend for an artist(graphic design, custom art, tshirt printing) in Illinois,
RevolverGraphix It is difficult to determine which type of entity would be best for you without more detail. If you are not making much money and have few liabilities, a sole proprietorship may be best. If you have lots of liabilities or are making good money, an LLC may be best.
In regards to Denton's Appliance, should he add his wife (if married) as a member to the LLC to form a partnership for additional protection from audits.
sir, i want to import alcohol from Mexico into the U.S, California. I will be importing Tequila bottles already set and ready to distribute to the stores, we are just starting up. I am thinking of setting up a LLC but i wanted to get some advice first. What do you recommend me doing ? What type of tax should i file ? Thank you
+jbanderas1990 Because of the special requirements related to distributing alcohol, you may want to consult with a local attorney with expertise in this area.
was thinking start as sp?I know the money going to come pretty quick since I have a lot of clients already
If you are going to start a gym and are going to have positive cash flow pretty soon you may want to start as an LLC, depending on what state you are in. If you are in a state that has smaller fees to start an LLC it isn't to hard to get it done. If you are in a state that has higher fees, then you may want to start as an single proprietorship and switch to an LLC later.
I am confused the verbiage Sole proprietor vs LL. Both are Classifications as an LLC correct? If you have setup a Sole proprietor LLC how can you change it to a corporation and what are the advantages and disadvantages?
BMOG The tax classification of an LLC is independent of the LLC legal structure. The legal structure is the same and the asset protection is the same no matter how the LLC is taxed : as if it were a sole proprietorship (disregarded entity), partnership, S corporation, or C corporation.
Hey I'm starting a tshirt company that will branch of selling all other items for example mugs, phone cases, ect what should I do should I go for sole or LLC.
+jessenia gonzalez The decision to become an LLC depends on the amount and type of revenue you are going to be making and the amount of risk there is in the business. If there is little risk from the products you are making, it is often useful to start out as a sole proprietorship so that you can see if you can even make money and then switch to an LLC. But if the products you are making is risky, you may want to start out as an LLC so that you get the asset protection. If you are making a good amount of money, you can then create an LLC and get some of the tax saving like being taxed as an S-Corporation.
I am looking into starting a mobile phlebotomy company and I really dnt know which I should start with a SP or LLC it will be just me to start with but since its dealing with sticking people with needles will having business insurance be enough if something happens
If the cost for setting up an LLC in your state is minimal then set up the LLC. If the cost for setting up an LLC is high in your state you may want to start as an SP and look into what kind of insurance you can get. Insurance is your first line of defense even if you have an LLC.
Lee i do have a Question if i am working by my self in appliance repair service and i do have insurance cover any damage at home also my truck is insuraned should i get LLC or Sole Propretorship ? thanks
Denton Appliance Repair Service The LLC could protect you in the event that you miswired an appliance and it caused a fire in a person’s home or something like that. Insurance probably wouldn’t cover that type of thing. You are in a low risk liability profession though, so maybe the LLC isn't worth it. it is just a judgment call and depends upon which state you are in and how expensive the LLC is. If it isn’t much money, then an LLC may help.
If you have it taxed as an S corporation, you could take a reasonable salary and then distribute any remaining profit. That would save you 15% on what ever you distributed. That may make the LLC worthwhile. All of that info is in my Advanced Tax Tactics product.
Denton Appliance Repair Service
Denton Appliance Repair Service, it would be better for you to get an LLC rather than stay as just a Sole Proprietorship in
order to have the additional protection of the corporate shield.
Denton Appliance Repair Service, it would be better for you to get an LLC rather than stay as just a Sole Proprietorship in order to have the additional protection of the corporate shield.
I understand the difference between an llc and sole-proprietorship. Now I own an LLC with 3 dba (sp). Who then the liability falls on since it is owned by the llc?
The liability will go to the LLC as long as the person knows that it is the LLC's DBA. If it looks like you are personally using the DPA, then the liability could transfer to you personally.
LegaLees got it. Thank you.
hi I have a question, I've been doing business as a tile subcontractor (sole P) and wondered if I can switch to LLC to protect my income I am making from a companies income or how much should I be making to form llc?? thanks
+Jay Castillo If you are making enough money to live on then it may be best to form an LLC. Another consideration you may want to think about is how much is how much will it cost to form an LLC. If you live in California, where it can cost $1,000 just in filing fees and taxes, you may want to wait.
Ok as a sole proprietorship you can loose your personal assists but can you get insurance to protect you from being sued.
You can get an umbrella policy that protects you from liability and can be a good alternative to forming a company, depending on the cost.
Hi Legalees, I want to ask you: I want to open an import export business, what is company status do you advise seeing that i am living in Dubai (no taxes unless customs). Do I need only a trading license ? Probably, i need to install the exported equipements, can i sub contract site works in case of sole proprietorship ? thank you in advance for your answers!!
+mehdi rajehi It depends on how much contact you will have with the United States. If you want to have legal rights in the US you have to at least register the entity in a US state. You can form a company elsewhere and register it in the US. If you register it you will become subject to taxes depending on what you are doing and how much money you make.
I'm becoming a lease opp truck driver starting my own business what's better sole p or LLC?
If you do live in California, then you probably will want to start as a Sole Proprietorship since setting up an LLC in California is incredibly expensive.
I have a 1 truck trucking co should i stay a solo proprietor or form a llc, or a s corp? Thxs
Michael Brinkley Without knowing all of your circumstances, it would be hard to advise you as to which form would be best for your situation. An S-corporation could save you on taxes as a single truck driver. A sole proprietorship could save you on filing fees for different states, because a sole proprietorship is not required to pay state filing fees like an LLC or corporation.
However, a sole proprietorship exposes you to direct liability. You can be an LLC and get S-corporation taxation, because you choose your tax structure with an LLC. As a trucker, you may have to register your LLC in multiple states, which could be costly. It really does depend on your specific setup.
I'm trying to open a moving company and I'm confused if I should do it as a sole proprietor or an LLC. it'll be just me and a friend for awhile until there's too much business for just us two to handle. everything will be in my name though so is it best to start as an LLC or a sole proprietorship?
If it is cheap to set up an LLC in your home state I would set up an LLC and operate under that name.
I recently inherited 4 rental properties, I wanted to keep them in my name heaven forbid a divorce, but for asset protection in Florida am I better off to just have an umbrella policy to keep it simple? We do own a restaurant in a S Corp.
Inherited property is usually not included in a divorce. You should try to keep it separate. It might be good to put the rental properties into an LLC for asset protection purposes. To get the charging order protection in Florida, you need a multimember LLC. You might have to have a son or daughter on the LLC. I assume the properties are in Florida. A good insurance policy is certainly your first line of asset protection defense. You always carry the insurance.
I don't feel like music production will ever come to be highly liable as far as client dealing and arranging song releases to distribution / licensing negotiations.
For now I can keep Sole Proprietorship, accept auditing at this discretion. Then move up to LLC when I have weight to move forward in cash flow.
Jim, you can set up an LLC and be taxed as a Sole Proprietor. It will give you the asset protection of a corporate shield.
Hey, could you please tell me if there are any difference between how LLC is taxed vs Sole prorietor? is it the same rate?
Please have a look at this article www.llcwizard.com/taxation-llc
I'm planning to start a non-medical in- homecare agency in California. Should I start as a sole proprietor or LLC?
You can start as a sole proprietor and then if the business become successful then you can form an LLC.
I’m starting a trucking company which structure would you recommend llc or sole proprietorship?
If you are starting out on your own and with no employees then you could start as a sole proprietorship and then change to an LLC as you become more profitable.
Can u do a video on how to pay yourself as an llc
See czcams.com/video/1JQn67Jjg58/video.html How to Get Money Out of Your Company
i want to start a record label and im at the establishment and security stage right now.... I will also be my only artist... should i go sole P or LLC?? and if anybody have any advise on how to establish and secure the label, that will be nice to share with me. .
+Tyrek Jackson If you are not actually going to be making any money at first you may want to consider starting as a sole proprietor. If you start making money or are going to sign another artist you can then set up an LLC at that time.
Can't you file a llc in a different state to avoid the expense you're referring to in those specific states?
It depends on where you are doing business. You have to file or register in any state that you are conducting business in. What counts as conducting business differs from state to state. If you live in California and have your own business then California considers you as doing business in California and you have to register in California. If you own rental properties in a state, you are conducting business in that state and have to register there.
if you start as a sole proprietorship can you switch over to an LLC later?
You can switch to an LLC later from a sole proprietorship, as long as the name is available.
In your professional opinion would it be best to start an online store as an LLC as opposed to a sole proprietorship?
+Tamira Vaughan If you have low liability from your sales, then a sole proprietorship will be OK until you start making money. Once you start making significant money you can then switch to an LLC. If there is significant liability with the products you are selling online, then you may want to start with an LLC.
I have a plan to open a business as Statistical Financial Consulting, I am doing risk management, simulation, portfolio, forecasting, statistical project, presentation...everything relates to statistic. So which one I should go?
+LOAN ROBINSON Without knowing all the details, my best guess is you will probably want
to structure it as an LLC taxed as a Subchapter S entity. It depends on if you are going to be making money and if there is going to be a chance for liabilities. If you have a small chance of liabilities you may want to start as a sole proprietor and then form an LLC when you start making money. If you think you will have liabilities you will want to start out as an LLC.
+LegaLees I can write email for you detail about my plan, can you please help me with legal paperworks?
+LOAN ROBINSON Contact our office at 801-802-9020 and info@legalees.com.
I have trucking cômpany in ca should gó with llc?advise
Not knowing the particulars of your situation, but generally speaking, you should have your trucking business in the form of an LLC in California. You should probably have your truck(s) in a different LLC. Delta airlines has each of its airplanes in a different LLC and rents them to the mother company.
for a trucker "owner operator" what's best for me ? llc or sole proprietor?
If it is cheap to set up an LLC in your home state, I would set up an LLC and operate under that name. There may be extra regulatory costs for setting up a Trucking LLC, so it may not be worth the time and money.
Hey man I want to start my own soccer academy. I'm thinking SP is the way to go. What do y'all think?
In Texas
It can be useful to start as an Sole Proprietorship and see if your idea is going to work and then transfer to an LLC or other entity.
I'm starting an online boutique and maybe later open a store can I start off as sole proprietorship and later decide to move to llc?
Yes, you can start as a sole proprietor and then change into an LLC when you start making more money.
+LegaLees ok thanks for the info
how do I get a name for sole proprietorship? I am looking to start small business at home, but I want to have a name, what is the process of getting unique name for sole proprietorship?
To get a name for a sole proprietorship you will need to register a Doing Business As (DBA) in the state you will be operating in.
Can i registered trade name? Will that work, or is that same as DBA?
Registering a Trade Name is a federal registry. A DBA is a state registry. It is more important to be registered in the state.
which is better llc or non profit
LLC is a legal entity and non profit is a taxing structure. They are not comparable. You can have an LLC that is a non profit.
Hello. I'm going to sell some goods online. I live in New York and I am gonna do everything by myself. Does it make sense to open LLC in order to get some protection or SP is enough to run my business?
Thank you.
It depends on what you are selling. If you are something that could have a high liability then you will want an LLC. If you are just selling simple items that have little liability then a sole proprietorship will probably work for you.
Thank you for your answer. I am going to sell some clothes.
And the only reason I didn't open an LLC is high publishing fee.
what if i want to start Flea-Market?? which one you prefer
+Azhure Badr The decision to become an LLC depends on the amount and type of revenue you are going to be making. If there is little risk to the type of revenue you are making, it is often useful to start out as a sole proprietorship so that you can see if you can even make money and then switch to an LLC. If the revenue you are making is risky you may want to start out as an LLC so that you get the asset protection. Risk on a Flea-Market may depend on where you will be starting it and what type of clientele you will be attracting.
LegaLees okat thank you very much...
what if i want to start a clothing brand?
+Devon Jones The decision to become an LLC depends on the amount and type of revenue you are going to be making. If there is little risk to the type of revenue you are making it is often useful to start out as a sole proprietorship so that you can see if you can even make money and then switch to an LLC. If the revenue you are making is risky you may want to start out as an LLC so that you get the asset protection.
I drop ship items from china directly to my customers, adult novelties, Im thinking sole proprietorship because im the only employee for myself and I work from home and a cell phone..
If you are not generating a large amount of income then you may be better off as a sole proprietor. If you start making considerable money then you may want to consider creating an LLC and getting some of the tax advantages from it.
+LegaLees well whats a large amount? I did 7500 in sales first month.. im on track to triple that this month.. or is it about the profits? in that case 2 - 5 thousand a month.. I wouldnt consider that much..what do you think?
It depends on your profits. If you are making over 50k to 70k in profits a year you may want to consider creating an LLC taxed as an S-Corp.
+LegaLees k thanks
👍🙏
im starting a landscaping businees what do i need?
+Willie Mccurry You need to make money. If you are going to be employing people you will probably want to start as an LLC since you will need an EIN. If you are just working on your own you could start as a sole proprietor until you start making decent money and then switch to an LLC. It also depends on what state you are in. If you are in a state that has low filling fees and taxes for an LLC you may just want to start out as an LLC from the start.
@LegaLees
Can a sole proprietorship be considered a company?
The legal entity of a Sole Proprietorship is not a company. However, an LLC can choose to be taxed as a sole proprietorship.
Thank you!
I'm from Jersey I know what you mean by foreign country 😤😤
Thank you for the video but I just want to sell costume jewelry and t shirts
You will probably not need to start a business unless it starts generating income that becomes your primary source of income.
What about just being an Uber driver part time
I don’t know what requirements Uber has for its drivers. You are entering into a big mess unless they have special provisions for you. Your personal auto insurance almost certainly will not cover you if you are in an accident while you are on duty for Uber. If you put your car in an entity (LLC or corporation) then your property taxes on the car and your insurance will likely triple. You do need some sort of insurance protection of the protection of an entity, such as an LLC. (Probably both protections)
If he's so smart how come he's bald?
When I had cancer 35 years ago, my hair came off all at once, so I put it in the drawer of the stand next to my hospital bed. When people asked what happened to my hair, I pulled out the drawer and told them, "Here it is!"
I was fresh out of law school specializing as a patent attorney, but after months in the ICU near death, I switched to estate planning and business formation to help others avoid some of the difficulties my wife had during the grueling experience. I've been working at this ever since.