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Discussion Starter · #1 ·
hey, what are the advantages of being a sole proprietor,compared to llc..Or isnt there any..I went sole propriotor because I am a 1 man show??????????????? Maybe I shouldn't be,don't know?????
 

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I'd go with the llc. in the event of a bankruptcy/lawsuit, an llc lays all responsibility on the business. With sole proprietorship, all financial/legal responsibilities are on you personally and in the evnt of a large lawsuit you could permanently hurt your ability to work or borrow money.
 

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There may also be tax advantages with an s-corp or llc. As a sole proprieter all of your net earnings are taxed as wages, as an llc or s-corp you can pay yourself wages and reduce your soc sec, unemployment tax, etc.

Not a cpa so take this for what its worth.
 

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In some cases I understand a corp. can pay you life insurance and health insurance and it is not a taxable benefit and a write off for the corp.
 

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The advice I've gotten from a lawyer is simple, "Become an LLC". When your company starts to grow, then consider making the switch to a corporation. Around here I would contact Labor and Industries to switch to an LLC. Contact whoever it is you used to register your business.
 

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The Deck Guy
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Discussion Starter · #14 ·
Nowadays, hiding behind an LLC is pretty slim. The lawyers will get right through it to you if you are indeed a small operation.
Hey Greg, I am a 1 man operation,more like a partime business.Don't do a ton of work,kitchens,baths,basements..I'm a union carpenter,so I do this when times are slow,I'm not a union kiss ass so I get my share of lay offs.. I am insured and waiting on my license as we speek.

Just looking for some advice..
 

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The Deck Guy
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Hey Greg, I am a 1 man operation,more like a partime business.Don't do a ton of work,kitchens,baths,basements..I'm a union carpenter,so I do this when times are slow,I'm not a union kiss ass so I get my share of lay offs.. I am insured and waiting on my license as we speek.

Just looking for some advice..
Don't take what I said as insult, just letting you know that the "corporate veil" an LLC provides is not bulletproof...that's all.
 

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Discussion Starter · #16 ·
Don't take what I said as insult, just letting you know that the "corporate veil" an LLC provides is not bulletproof...that's all.
Not at all , I am registered as sole proprietor..Since I don't to a ton of work,I figured that is fine..Really don't know much about llc,or corp.
 

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Yes there is an advantage to a sole proprietor, you save about $230. Disadvantage is you risk someone taking your house and everything you own.
That is correct, but any good lawyer can also easily pierce and dismantle the corporate shield of any type of incorporated sole proprietorship. Not that there is no reason for a sole proprietor to incorporate, but they are not nearly as shielded as one would like to believe
 

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That is correct, but any good lawyer can also easily pierce and dismantle the corporate shield of any type of incorporated sole proprietorship. Not that there is no reason for a sole proprietor to incorporate, but they are not nearly as shielded as one would like to believe
O.k but "easily" isn't correct according to what I was told by an attorney. He tells me you get a significant amount of protection with an LLC even though it is not bullet proof. So for the $230 it is worth it.
 

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Advantages of Sole Proprietorship
- less paperwork
- minimal legal restrictions
- owner retention of all profits
- ease in discontinuing the business
- no need for separate Employer Identification Number (EIN) from the Internal Revenue Services unless it has employees
- no need to file separate income tax return because business activity is reported on the owner's individual income tax returns
- self-employed person is not considered an employee, so no withholding payroll taxes to cover personal federal, state, and Social Security tax obligations (not true if you have other employees)
- must make quarterly estimated payments to provide for these tax liabilities.

Disadvantages of Sole Proprietorship
- unlimited personal liability for all debts and liabilities of the business
- limited ability to raise capital
- termination of the business upon the owner's death
 

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so you will be a 1 man corp?
what if you need a new truck or want to advertise in the phonebook?
are you going to have a board meeting and vote on it?
do you want to change your cell phone over the the corp?


dont let anyone tell you that it will only cost $250 to incorporate.........costs alot more than that, they dont tell you about the paperwork for shareholder and director meetings,
if youwant/need something, other than day to day stuff, you have to have a meeting and take minutes .
 
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