Forums: Discussions for entrepreneurs and small business.

Hello Everyone I'm new here. My name is Pedro. I've finally gotten the wheels rolling on a small business idea that's been on my mind for the last year of college. In one week I've learned quite a bit about LLC's and licenses.

I will be selling digital canvas prints that I designed on my own website, and they will be getting drop-shipped by the printing service I found locally. I will eventually like sell other designed home-décor items such as wall clocks, floor lamps, and other inspired home items under that same business.

1. Should I go ahead and create an LLC or is a sole proprietor enough? (are there a few immediate liabilities you can think of?)

2. I plan to co-design the latter products with my partner so we imagine splitting the probable LLC 50% - 50%. Currently we only have the designs I have created. Would it be easier to split the LLC anyway from the start? I don't want to burden my partner with 50% of the taxes when he isn't receiving 50% of the profits (YET). Any advice?

3. Do I need to wait for the LLC to be formed before I purchase anything for the business (Design Software License, Quickbooks, webhosting, etc.) or can I still deduct it as a business startup expense if I purchase before the LLC is formed?

A lot of the information I get on LLC's is for businesses that will be dealing with investors, going public, etc. As you can see all I am trying to do is a simple product sale.

Many questions, but thank you so much if you can help me with any of this!

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If your business interacts with anyone, whether it be customers, vendors, employees, service providers, you should not be operating your business a sole proprietorship. In today's litigious society, operating a sole proprietor business is creating a bright red target for lawsuits. Form an LLC for your business and you will automatically reduce your risk.

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I see a lot of online business today opting for LLC. Forming an LLC is helpful especially to fledgling businesses. It merges control and tax advantages of a partnership while having the advantage of limited accountability. LLC members are also protected from liability for business debts or claims. An LLC is more flexible than a corporation because owners can be individuals, trusts, partnerships, corporations and non-resident aliens. Plus maintenance is easy; LLC has less formalities and easier than running a corporation.

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