Forums: Discussions for entrepreneurs and small business.

I was wondering if anyone would be willing to give some advice....I keep going back and forth and would love some opinions. 

I have a event/wedding planning business that I am in the process of growing. As of right now I am figuring I will not really be profitable for 1-2 years(right now I am growing my portfolio & donating a lot of my services).

I really want to have a business not a hobby so I am trying to do it right. I was planning on doing a LLC, but S-corps kept grabbing my eye. Than today I had a good friend(who also owns a SB) tell me the best bet was to just do a DBA & get a EIN #. I never really looked at this option to be honest. It almost seems the the easiest & best way to go. 

Any thoughts?

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Also I was wondering if I do just go with a DBA and plan on later switching to a LLC would I have to change company name? This is something I will not want to do. 

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ColoradoChic,

Choosing the best structure for your business depends on your plans and priorities- so I can't give you specific input without more information.

However, here are some general comments:

1. The dba is not a business structure. Sounds like what your friend suggested is to operate as a sloe proprietor and secure a dba so you can use your chosen company name

2. While this approach is the simplest, easiest and cheapest to set up and maintain - it offers no protection / separation for your personal assets. You are the business and and will be liable for it's actions.  It also limits what you can do about acquiring capital- should you ever need to do so.

3 Both the LLC and Corporation approach create separate "entities" which separate your personal activities & assets from those of the business.

4. The Sub chapter S option creates a pass through taxation entity which means that the corp. doesn't pay taxes on it's earnings but "passes them through" to the owners. There are some restrictions and rules concerning the operation of an corporation under Sub chapter S which should be considered before choosing that option.

5. The LLC offers the separation of activities (like a corporation) and the pass through taxation of an S Corp.  It offers more flexibility than a corp but is fairly new and doesn't have the amount of legal precedence as does the corporate structure.

Hope this helps. If you want to discuss your specific situation, please drop me a PM or contact me directly using the address in my signature.

 

 

 

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Business Growth Masters, LLC -
Capital Catalysts for Entrepreneurs
Home of the Scalable Business Plan and QuikStart Capital Programs
http://www.bizgrowthmasters.com
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That would be a good idea!

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