Thread: Anyone have an LLC?

I realize this is a hockey board...just looking for anyone with experience.

I am thinking about starting a small consulting biz...mostly research, predictive analytics, and program evaluation type stuff.

Looking over my options in California, it appears as if there are three reasonable options...sole proprietor, LLC, or S-Corp.

Definitely going to be a small Business. Low overhead and primarily working out of my home office. Honestly, profits may be weak to start as I build a client list and word-of-mouth business. An LLC seems like the right option, but do I want to be on the hook for the minimum $800 franchise tax in my first year? Not really. Is an S-Corp a better option in California?

Originally Posted by HrudeyRules

I realize this is a hockey board...just looking for anyone with experience.

I am thinking about starting a small consulting biz...mostly research, predictive analytics, and program evaluation type stuff.

Looking over my options in California, it appears as if there are three reasonable options...sole proprietor, LLC, or S-Corp.

Definitely going to be a small Business. Low overhead and primarily working out of my home office. Honestly, profits may be weak to start as I build a client list and word-of-mouth business. An LLC seems like the right option, but do I want to be on the hook for the minimum $800 franchise tax in my first year? Not really. Is an S-Corp a better option in California?

I went the S Corp route. And no matter what folks will tell you, you don't have to pay an accountant or lawyer to help set you up. I got quoted over $5,000 to have my accountant do it. He's not my accountant any longer. I went here instead - S Corporation | Form an S Corp Online | BizFilings. Super easy. BTW, I live and work in CA out of my house.

I set up a LLC in Nevada 8 years ago on mycorporation.com. I think you can also use Legalzoom.

you don't need an accountant to set it up, and you'll need a good one to understand your potential liabilities and tax writeoffs.

Originally Posted by nosoupforyou

and you'll need a good one to understand your potential liabilities and tax writeoffs.

This is THE most important thing after you've established. Find a bull dog accountant. What you pay extra to him/her is absolutely worth the money.

Originally Posted by HrudeyRules

I realize this is a hockey board...just looking for anyone with experience.

I am thinking about starting a small consulting biz...mostly research, predictive analytics, and program evaluation type stuff.

Looking over my options in California, it appears as if there are three reasonable options...sole proprietor, LLC, or S-Corp.

Definitely going to be a small Business. Low overhead and primarily working out of my home office. Honestly, profits may be weak to start as I build a client list and word-of-mouth business. An LLC seems like the right option, but do I want to be on the hook for the minimum $800 franchise tax in my first year? Not really. Is an S-Corp a better option in California?

An S-Corp still needs to pay that $800 tax.

Any corp or LLC doing business in CA has to file and pay the $800.00 and also file an annual statement of information. IF you set up a corp or LLC in Nevada, you still have to register in CA and pay the $800.00. If someone told you other wise they are flat out wrong. If you do not do this you have zero liability protection.

Why do you want to be a corp/LLC? Is it for liability protection or tax advantages? There are some tax savings, but you will need to have a profit and take into account of the extra fees. I am not trying to get your business, but just to inform you. We charge $500-600 for a corp return if it is a single member LLC then the fees are minimum. You also may have to run payroll on yourself, so there is that extra fee and responsibility.

You can always be a Sole Prop, get good insurance (which you need anyway) and then become a corp or LLC later if you are making a profit.

Also if you are a corp or LLC and you are not operating it properly and get sued someone will probably "Pierce the Corporate Veil" and you will have no protection. Make sure you operate it as a corp and hire an attorney for an annual review and to draw up your minutes. They will probably charge about a few hundred bucks a year, but in my eyes it is worth it.

There is a crap load more I can write, I am not an attorney, I am an Enrolled Agent (tax-preparer) so the advise I can offer is going to be tax related.

I'm an LLC, but in Pennsylvania not in CA. The reason I went with an LLC instead of being an S-corp was because of the pass-through on the federal taxes. The profit or loss of an LLC is shared among the members, and since I'm the sole member... I also went for the legal protection the LLC offers vs. a sole proprietorship.

Some advice I will offer you: if there is a chapter of SCORE or a SBDC (Small business development center) in your area, contact them and set up an appointment to discuss what you want to do and see what resources they have available to assist you. They'll discuss the pros and cons of the three types of setups you looked at. They will help you prepare your business plan, and work with you on your financials. They'll basically tell you all the crap you need to know that you never thought of.

Another thing you'll learn is that you can't do it all, no matter how much you think you can or want to to save money. You'll find out that your two main objectives will be 2) Doing your consulting work and 1) Marketing to get more consulting work. You will spend more time trying to get jobs than actually doing your job, at least to begin with. Delegate the other stuff-- retain an attorney and accountant for when you need them. If you have payroll, hire a service to do it-- eliminates a lot of headaches. Find someone good and reliable to do your website. In the scheme of things, you have more important things to do, even if you're fantastic at web design.

Good luck with the new endeavor.

don't go sole prop or even regular partnership if any service or product you provide can be held liable against you and therefore any asset you personally own.

you don't need to do minutes in an LLC. you don't need to run payroll on yourself if you are an LLC.

LLCs give you more flexibility in paying yourself vs a Corp. The challenge is that LLC fees go up substantially if your total revenue goes over a certain amount (look up a table for this).