Sole Proprietor VS. LLC

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Sole Proprietor VS. LLC

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Faus

posts: 5

Mar 05, 2009 11:55 PM ET Quote Report Abuse

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Hello StartupNation Community,

My wife and I are starting a Nanny Placement agency and are unsure of the business structure that would be best for us. Other than the "protection" that LLCs provide, are there any other differences between these two business entities?

Thanks,
Steve

mfackrell

posts: 227

Mar 06, 2009 1:44 PM ET Quote Report Abuse

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you should never operate as a sole proprietorship.

It is not difficult or expensive to incorporate or organize an llc.

Plus, the irs audits sole proprietorships more frequently than other entities.

ahandyvoa

posts: 2

Mar 06, 2009 3:41 PM ET Quote Report Abuse

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I agree -- after doing the research on virtual office assistants I came to the conclusion that LLC was the only way to go.

Faus

posts: 5

Mar 06, 2009 4:19 PM ET Quote Report Abuse

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Thanks for the help.

I live in California but want to avoid the tremendous amount of taxes from this state. Can you operate an LLC in a different state in which it is registered like a corporation?

mfackrell

posts: 227

Mar 06, 2009 4:44 PM ET Quote Report Abuse

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yes, but you will still pay CA tax, the only way to get out of doing that is to do business and live in a different state.

sorry, they want (and get) their cut of the pie.

MattThomas

posts: 203

Mar 06, 2009 5:02 PM ET Quote Report Abuse

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There are certain fees that are cheaper in other states if you incorporate elsewhere (Delaware is often regarded as a great state to incorporate in for this reason), but as Mark mentioned, you can`t avoid the state taxes.

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mfackrell

posts: 227

Mar 07, 2009 9:18 AM ET Quote Report Abuse

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The inital fees may be less expensive, but you will need to pay a registered agent in whatever state you incorporate, and that is an ongoing expense.

WebJunky

posts: 549

Mar 07, 2009 7:10 PM ET Quote Report Abuse

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forget about taxes, forget about all else....i am surprised you have not considered the liability aspect. you are risking your bank account, car, house and your shirt if you are going at it solo...take advantage of the corporate veil and protect yourself!

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GimmeDap

posts: 2

Mar 08, 2009 1:41 PM ET Quote Report Abuse

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Definately LLC.

I have an LLC and like someone said early it`s inexpensive to start one and it`s worth it.

WebJunky

posts: 549

Mar 08, 2009 9:59 PM ET Quote Report Abuse

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best to start locally wherever you are at....but if you want to look out due to costs then consider MI. it is $25

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The Extra Money Blog
Make Extra Money Online - Paid Surveys
File an Airline Complaint - Sue the Airline
Dubai Information
Accounts Receivable Factoring
Structured Settlements
Raw Food for Dogs
Care of Bamboo Plants

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