Question for those of you who run your own business.

[Aaron Gein]

I'm working on taking steps toward making my printing studio less of a hobby and more of a real business. I've done a lot of research on the legal side of business, have experience running someone elses print shop, and have taken some entrepreneurial classes. But this will be my first step into actually starting a real business.

My question is how many of you guys are setup as a sole proprietorship with a DBA, etc., and how many of you are an LLC?

I'm trying to decide if the liability protection of an LLC is really worth the trouble in the beginning stages to set one up or if I should just file a DBA, get an EIN and a Certificate of Authority and go to town. Thoughts?

[standard]

I filed a DBA with my town because I needed one to open a business checking account, which I required once upon a time when a client wrote a check out to "Standard Design" instead of "Tom Pappalardo." Suddenly, I was a business!

It's the bare-bones you'll need. I'm still sole-proppin' it like, a decade later.

[halfmassive]

I set up my stuff last year as a business even though my volume is really low and its mostly a summer gig for me. I went the sole proprietor route, since I don't have enough volume at the moment to justify the $450 it'd cost me for the LLC. All the set up stuff was really easy the only bump in the road was dealing with state sales taxes. There was a handful of things (like IL use taxes) that I wasn't exactly sure of but the guy who does my taxes helped me out whenever I had a quick question. Having my tax guy has been the most helpful thing and his services are a lot cheaper than I was afraid of. I'd try to find a friend or an independent tax dude b/c the chain services are a rip off.

Even though I get no where near the business of a lot of people here being legit helps me with apparel suppliers, some equipment stuff, and I get a little more of a refund at the end of the year.

[Josh Rickun]

i had an LLC because I was making local based t-shirt designs, since we were getting ripped off left and right it only seemed a matter of time before somebody accused us of stealing from them - and that happened. we won (and ended up with a federal trademark). the LLC worked as a good buffer so we wouldn't personally get screwed out of anything, just the company.

[Andymac]

it's different up here, but the level from a tax standpoint where you create a Ltd company was around $70-80,000 a year. Here i have to get an accountant to do my year end, and have a lawyer file yearly, which is extra cost.

We started as a proprietership for the first 5 years, till it was worth making the jump.

the best advice my dad and others ever gave me, which took a while to figure out, is get a good accountant who you can trust. they will tell you what you need to do as far as setting up and what is right for your particular situation. I owe whatever business and financial success I have now to having a good accountant. My first one skipped town.

[alexfugazi]

Hmm. Perhaps I should LLC now.

[piemel]

Might as well think about tax benefits of being self employed

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[squeegeethree]

Just a word of warning if you are starting your own business on the side. If you are working a main job, which you count on, but own a side business, if you lose your main job you cannot file for unemployment if you own another business.

[Andymac]

on the other hand (and I'm too lazy to read rene's link) one of the best ways to minimize taxes and maximize your life is to run a part time business as a proprietership, especially from home, and keep your dayjob.

All purchases that have any link to your business become business writeoffs, including a portion of rent, utilities, auto etc. computers and other stuff. Internet and phone. this comes off the combination of your job income and your business income, so your tax rate will come down. Of course if you start making shitpiles of money it won't matter, and that's where the accountant comes in, they can tell you from a tax planning perspective when to make the leap and incorporate.

In Canadia, (not sure in the USA) your tax rate on a proprietership is the same as normal people, based on your income. but if you have a business as well, you get to deduct all sorts of business expenses, including travel and other things that a normal working schlub wouldn't. Life is a writeoff.

When you incorporate (again in Canadia, not sure down there) the tax rate on the business is less than personal rates. You can control how much you make personally to minimize your personal income tax, and take them as dividends (Go MITT)

the downside for small operations is the extra yearly costs to maintain the corporation. the issue of getting sued....you're fucked either way I figure. but the odds of someone killing themselves with your t-shirt, or getting a papercut from a poster where they lose and arm or go insane from your image and kill 20 people....I think that's pretty remote.

[Nicholas Wilson]

LLC Partnership from day one.

Protects your personal assets. Easiest and safest.